10 basic rules for successful franchising

Picture: SandwichBaron.co.za

1. Run the shop yourself

There are not many, if any, instances of successful manager-run Sandwich Baron outlets. You are unlikely to make it unless you are personally running the business on the shop floor. There are examples where franchisees think the business is doing well, only to find once their bookkeeper completes the books, their stock is being stolen to fund somebody else’s business.

2. Take personal responsibility for the performance of the store

‘Do you plan to run the shop yourself?’ This is always my first question to any prospective franchisee. Unfortunately, some people do not believe me when I say they must run the store personally. Once it is up and running, some leave their business under the control of a manager and when it begins to lose money (as it will) they blame the manager and staff. The real reason for the loss is their absence. You cannot expect a store to run itself or be run by the staff. Take personal responsibility for the performance of your store.

3. Sign up for some financial training

Stock theft is but one example of what can happen if you are not constantly tracking your business. While franchisors have wonderful systems to help you build a successful store, you need to supplement that with basic business skills of your own. If you do not know accounting basics, or how to interpret financial documents, or for that matter how to hire and fire employees, you had better learn. Otherwise, you are going to encounter trouble. It is especially important to track your food costs as a percentage of revenue.

4. Computer literacy training

Our franchisees have a slightly older age profile than other franchise systems, often having no idea about the digital age and the marketing tools available via social media. After their financial training, a computer literacy course should be next on the list. With technology advancing at an accelerated pace, you must learn how to keep abreast, unless you want to become a dinosaur. Occasionally attend thought-provoking seminars, short courses at business schools and read voraciously.

5. Customer service

If you do not like people, do not be in the food business. Communication skills are vital in this industry. It is not unusual for some franchisees to back-off on dealing with customers through previous unpleasant experiences, but realise you are going to have to overcome that resistance. Business is not about what the competition is doing or even the prices you charge, it is all about your customers.

6. Don’t buy a franchise just for money

You can make a good living from running a Sandwich Baron franchise, but if making a lot of money is your primary motivation, you are unlikely to have the necessary passion for this industry.

7. Take control

To make money, you must have controls in place, without these you will most likely fail, as people take advantage of you. Part of the reason you chose a franchise is because it has a successful system. You purchased a tried-and-tested system, now to be successful you need to learn and understand it. Take full advantage of franchisor training and the tools you will receive to build a business. However, remember the ultimate success or failure of your store is largely your responsibility, it is part of the appeal of entrepreneurship.

8. Always have a positive frame of mind

It is important to have the right mental attitude, always, to achieve your goals. Your attitude affects your performance, relationships and staff.

9. Never stop marketing

Above all else, the sales and marketing is also your responsibility. You have nutritious, fresh and tasty products that are proven in the marketplace. Put a plan in place and market your product continuously analyse the effectiveness and share your ideas with management and your fellow franchisees. Remember that word-of-mouth recommendation based on customer service is the most effective marketing tool you have.

10. Financial expectations

Our franchise charges a 6% royalty, in exchange for which franchisees get various discounts that repay the royalty, but it also gives a higher turnover due to group marketing and consumer awareness. The average turnover per store is R222,000 per month, a level which should provide franchisees with an average income of R30,000 to R35,000 per month. Some franchisees can earn double that by closely following these rules.