You’ve done it. You are a successful and independent business owner with a proven track record. Your internal operations are streamlined and they work beautifully together. The next step is to expand, right?
It depends. Would the individual success of your single unit automatically replicate into other locations? Would the systems of your first independent location scale well via franchising? In other words, do you have operational scalability?
Defining Operational Scalability
Operational scalability is the business’s ability to scale its organization, system, business model, or function to cope with an increased demand for their product or service and the ever-expanding workload required to fulfill their customers’ needs.
Successful companies scale their operations by continually adapting their business structure, increasing the resources necessary for higher production volumes, and training and supporting their staff to keep up with higher demand.
A business’s ability to scale its operations depends heavily on its ability to communicate to staff, customers, and potential investors effectively.
4 Factors That Impact the Operational Scalability Of A Franchise
#1 Replicability of the Operational Model
The franchise’s operational model’s replicability refers to its capacity to reproduce its structures, processes, products or services, and the franchise’s habits.
To effectively replicate its operational model, the franchise needs to standardize its most critical processes so that a franchisee can follow them more easily.
#2 Adaptability of the Operational Model
The franchise’s operational model’s adaptability refers to its capacity to adjust its business structure, processes, products or services, and habits to suit its own customers’ needs better.
The operational model also needs to be able to adjust during times of uncertainty, such as during a pandemic. As stated in a recent post by RingCentral, “The unfortunate reality is that in times of crisis, nothing is certain. Organizations [and franchisees] just as prepared as others might undergo more damage simply due to the nature of their business. Recovery plans should include the ability to scale operations to accommodate changing business needs and structural cost cuts.”
#3 Transferability of the Operational Model
The franchise’s operational model’s transferability is the unification of its replicability and adaptability. For example, when the franchise enters a new geographic location, it sometimes needs to replicate its operational model and adapt it to suit the population’s needs and the unique conditions in that area.
Splitting transferability down into its individual components allows the franchisor to analyze the scaling process more effectively.
#4 Obtain Necessary Resources
If a franchise cannot secure the resources it requires to increase its production or services, it will not be able to scale efficiently. A franchise’s operations scale because there is a demand for it. If these demands cannot be met, the franchisee will get rejected.
Effective Franchise System
Many aspiring entrepreneurs look towards opening a franchise because it could give them the support they require to succeed. By partnering with a reputable franchise, a franchisee could guarantee a steady flow of income.
Three factors make up an effective franchise system.
- A Strong Brand. A strong brand will attract new customers and generate familiarity and trust with the franchise. A strong brand also increases the franchise’s perceived value and will drive demand for new franchise opportunities in emerging markets. All successful franchises have a robust and far-reaching brand.
- Competitive Products and Services. Being competitive in relevant markets is crucial for any franchise if it wishes to be successful. Healthy competition is necessary for any industry. Having competitive products and services helps drive innovation and reassures consumers that they have a choice. Competitive products and services also build customer loyalty and enable consumers to identify a franchise more easily.
- Ongoing and Effective Assistance. Effective franchise systems give continuing assistance to the franchisees that have partnered with them. Having a motivated and energized team of franchisees significantly increases the franchise’s growth. Having a comprehensive support system will ensure franchisees feel supported.
Six Success Factors Required to Scale Franchise Operations
A Proven and Replicable Business Model
First, a proven and replicable social business model is a success factor. The starting point of social franchise development is a well-established business concept when the pilot phase is finished. Success is measured both by success in reaching social goals and by the ability to demonstrate profitability. That it is replicable means that it has been possible to describe and standardize the most critical processes in the enterprise so that someone else can follow them.
Add Value Through Service Delivery
Commercial value is an added value, with a focus on service delivery. A social enterprise must, in the first instance, deliver quality services or products to its customers.
Careful Selection of Franchisees
Regardless of how good the franchise is, wrong entrepreneurs can cause the business to fail. A franchisor exerts the most significant influence on the company’s future outcome during the choice of franchisees.
The ideal franchisee possesses an entrepreneur’s enthusiasm. They have the drive and skills to lead the team the makes up their business. Their drive and ambition should align with the core values of the franchise.
Access to Financial Resources
To successfully scale the franchise, it needs to have enough financial resources to develop its core concept fully. As demands for the franchise’s products or services increase, so will the need for employees, financiers, and stakeholders. All these pieces are vital for the franchise’s survival.
Commercial Mission Commitment
A franchise needs to remain committed to its business’s mission. This conviction will carry the franchise through many hardships during its lifetime. If a franchisee fails to uphold the franchisor’s commitment, its customers will lose faith and look to support a different franchise altogether.
Exchange of Knowledge
Franchisors are encouraged to create a platform to exchange knowledge within the system to provide additional support to all staff and management that look to it for guidance.
A Franchise Example: Jani-King
To understand how we can scale their franchise’s operation, we can look to other companies that have been immensely successful, like Jani-King, the biggest franchise in cleaning services with over 9000 franchisees in 14 countries.
Jani-King was not an overnight success, so what did they do?
As you should expect from successful franchisees, they:
- Streamlined the process
- Offered quality services
- Standardized the process
- Hired the right people
- And a unique opportunity whereby Jani-King itself obtained new commercial cleaning accounts and offered it as an initial customer base to the new franchisee, guaranteeing steady business in those crucial first days!
Successfully scaling your franchise’s operations will require effort and patience as you streamline your business model and focus on your franchise’s core strategies’ replicability. There is no one-stop solution that applies to every different kind of franchise option available. As the franchise owner, it is your responsibility to equip all your franchisees with the tools they need to take your franchise to the next level.
If you are considering franchising your business, a franchise consultant can provide an independent assessment of whether your business is franchisable. At EmmerScale, we have decades of experience working with franchisors to penetrate and successfully engage the franchise market. If your long-term objective is to harness the opportunities successfully within the franchise market to grow your business, contact us for more information. We can help you achieve that goal.