5 Tips for Franchisees

  1. Be Savvy About Location

    One of the toughest decisions for a potential franchisee is choosing where to set up shop. The good news is that many restaurant franchises, like Noodles & Company, a fast-casual restaurant chain based in Broomfield, Colorado, with more than 240 locations, won’t hesitate to share their knowledge of the site characteristics that lead to successful locations. But, “at the end of the day, the franchisee is responsible for selecting his or her own site,” says Wayne Humphrey, the company’s vice president of franchising. “And we have a very stringent approval process. They have to make a presentation to us with data on not just the demographics, but also the real estate picture--construction costs and co-tenants--and really sell it to us.”

  2. Find the Right Staff

    Every franchisee has to, as former CEO Doug Ducey of Scottsdale, Arizona-based Coldstone Creamery puts it, find his or her ‘X-Factor,’ which he describes as the magic employees can create with their customers to turn an ordinary business into a destination. In the case of Coldstone’s franchises, every store’s goal is to become a go-to place on Friday nights. Finding the right staff is integral to this process. “It’s proven that franchisees with exceptional employee-customer interaction do better than those who are just adequate,” Ducey says. “The fact is, you can have a great product, keep a clean store, even have a great location -- but if your crew members don’t leave an extraordinary impression on your customers, you’ll limit your business."

  3. Follow the Playbook

    A franchisor didn’t become one just by luck. The company has a proven product and business model, which, lucky you, means that the hard work’s already been done. As a franchisee, you should learn what sets your company apart. For example, at Five Guys Burgers and Fries, a burger chain based in Lorton, Virginia, that Jerry Murrell and his sons grew into $483 million company, an obsession with detail is key. “About five years ago, hurricanes killed the tomato crop in Florida, and prices went from $17 to $50 a case,” Murrell recalls. “I suggested using one slice instead of two. My kids were furious: ‘It should be two! Always!’ They were right — it’s too easy to start slipping down that slope. We stuck with two slices, and so did our franchisees.”

  4. Pursue Your Passion

    When Great Harvest Bread screens potential franchisees, the Dillon, Montana-based bakery franchise looks at more than just the numbers. “Of course they have to be financially strong enough and have the working capital to take on the risk,” says Debbie Huber, the company’s director of development. “But we really try to figure out if they’re passionate about the business. That doesn’t necessarily mean they have to be passionate about selling bread. They can be passionate about food in general, or it can be a different aspect of running a business, like growing and nurturing employees, or giving back to the community.”

  5. Plan for Growth

    Signing up as a franchisee isn’t for the casual businessperson, says Tariq Farid, the CEO of Edible Arrangements, a retailer of fresh fruit bouquets based in Wallingford, Connecticut, with over 900 locations worldwide. “A lot of people want to open a store and they’re very excited about that,” he says. “But are you excited about opening a store, or are you excited about becoming an entrepreneur? A lot of times people miss the big goal. The goal isn’t to open one store—we want you to open 40 stores. This requires a lot of commitment, and so we’re looking for someone who knows what they’re about to get into. A franchisee has to be willing to make sacrifices and take on the risk.”

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