The Seven Pillars™ Of Franchising Success
Read about the Seven Pillars™ in the News
The most important things to consider when thinking about franchising your
business are Brand, Team, Concept, Investment, Capital, Validation and Perseverance.
These are The Seven Pillars™ of Franchising Success and what I've been
educating clients about since 1987. If you're missing any one of these seven
pillars, you cannot succeed in franchising - you will fail! If you work with
me to obtain the seven pillars, you will succeed! Here is a brief summary
of each.
Brand
Your brand must resonate with your consumers the same way McDonald's® resonates
with the average two year old child, strapped into a car seat in the back
seat of a vehicle traveling at 70 miles per hour down the highway. You must
be able to obtain federal protection for your trade names, trademarks and
logos.
Team
Having a good team of people who share a strong belief in your business concept
is critical to success. These people should be expert in one or more of the
following disciplines: business, management, technology, accounting, finance,
sales, marketing, advertising, systems, control and legal, in addition to
having expertise in your services and/or products.
Concept
What do you do? What do I need you for? Advertising, marketing and sales professionals
have been grappling with those two questions since the modern consumer period
began a little over 100 years ago. Snappy one sentence answers are required.
As for growing your business, the investors, licensees, distributors, franchisees,
marketing representatives, or what have you, must link the concept with a
return on their investment relative to the perceived risk they're taking.
The concept also becomes part of the corporate culture and identity.
Investment
The goal in opening additional units should be to fulfill consumer expectations
at the lowest possible cost. The first level of investment review is determining
the overall function, design, ambiance, centrality and outside amenities necessary
for day-to-day business. The second level is determining a potential return
on investment relative to the risk undertaken.
Capital
Capital - every enterprise needs it to fuel success. What is necessary is
knowing how much you'll need, knowing when you'll need it and knowing what
type of returns can be expected. Capital can come from several sources. Financial
sources, ranging from internal cash flow to debt financing, private or public
equity investment, savings or more creative capital raising are traditional
methods! Capital can also come from business sources such as franchising,
derivative franchising, multilevel marketing or distributorships, to name
a few. There is fierce competition for today's investors' dollars. We're operating
in a world where investments of moderate risk are returning 10% to 15%, or
more, annually. Investor expectations today are higher than ever.
Validation
With any program, you need franchisees who are thriving in your system. They
are the team members who can sing the praises of your franchise. They are
also the members of your team who can legally discuss earnings potential based
on their track record. Validation is imperative to growing your chain because
the Federal Trade Commission strictly regulates Franchisors who are making
earnings claims. However, your franchisees are not bound by these regulations
because the can speak directly from their own experience.
Perseverance
Starting your own business is a challenging proposition. It is true that only
one out of ten start ups last long enough to see their first anniversary.
And only ten percent of those survivors see their fifth anniversary. With
these odds stacked against you, your ability to weather the storms every start
up endures will be crucial.
