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4 tips for long-lasting franchise success

What does it take to succeed as a franchisee in a climate of changing labor policies, nutritional guidelines and generational trends?

May 13, 2015 by Nicole Troxell — Associate Editor, Networld Media Group

What does it take to succeed as a franchisee in a climate of changing labor policies, nutritional guidelines and generational trends? 

It takes more than money and hard work; franchisees must stay up-to-date with the lastest statistics, products and more. Two industry experts offered their advice for long-term success as a franchisee:

1. Passion, planning and realistic expecations are a must

Long lasting success starts with a high degree of passion and commitment to the brand, the business model and the culture of the brand, according to Tony Gioia, CEO of Togo’s Eateries, Inc, a chain of fast casual sandwich restaurants owned by Mainsail Partners and headquartered in San Jose, California. Gioia said that over the years, he's learned that some franchisees enter a business without realistic expectations about what it takes to be a successful owner.

"Franchisees need to be well capitalized, have both a short-term and long-term business plan, and understand the power of a well-trained and inspired crew to serve their customers. Managing cash-flow in the early years of operation is critical. Franchisees must have a maniacal focus to win, regardless of the obstacles they face, which will be many," Gioia said.

Togo’s process to ensure commitment is to screen for all these factors before inviting someone to join its family of franchisees. But that’s not enough, according to Gioia. The company also develops an on-going business relationship at the field and executive levels to help secure long-lasting success.

2. Hire the right people for the right job

Jason Valentine, vice president of operations at Cousins Subs, stresses that hiring the right people is important for success. Cousins Subs' hiring process is to test each employee for a set of characteristics that are compatible with the company brand and culture.

"To identify those who would work well within our culture, we use a People Development Plan which identifies eight qualities of a Cousins Subs employee. Many of these qualities have a direct impact on our ability to properly train and execute order accuracy."

Cousins Subs prefers employees to have qualities such as a "servant's heart," motivation, and ability to multitask and hustle.

"A person with a Servant’s Heart is genuinely committed to serving others before serving themselves. They find satisfaction in serving others in all situations. If an employee is truly concerned about serving and taking care of the guest, they will be less likely to make mistakes," Valentine said.

The company defined what each characteristic entails. Motivation, for example, is defined a someone who is "eager, driven and determined to accomplish a goal. A motivated employee will be more likely to want to succeed."

Multitaskers are staff who have an "efficient thought process to manage multiple tasks at once," and to hustle means that "an employee is a fast-paced individual that can quickly get from point A to point B. In the restaurant operations environment, hustle can lead to preventing or catching mistakes."      

"A rookie mistake is trying to do everything yourself and not delegating to the crew you hired and trained," according to Gioia.

Operators should spend much of their time speaking to their guests, motivating their crew and connecting with their local community, he said, which includes implementing an aggressive off-premise sales program and a robust social media presence. Togo's integrated a program for franchisees to drive sales through delivery, online ordering, and business-to-business and community marketing. 

3. Evaluate inefficiencies

According to Gioia, franchisees should realize more operational efficiencies to offset labor costs, while still providing value to the guest.

Valentine believes this is an operators duty, and starting at the employee level is key:

"All operators have a responsibility to make sure their employees are setup to succeed. Order accuracy will be easier to train and learn if the right procedures and processes are in place. We encourage restaurant operators to constantly experience your operations and tweak any areas that need improvement. When operators experience the operations, they should ask themselves basic questions including: Do we have the right equipment, are the training materials useful, do we have items labeled, is our setup efficient and what would a newer employee struggle with?"

4. Go digital

It's been said a hundred times, but for a reason: Advanced technology will improve a restaurant’s process and quality of training, according to Valentine. Cousins Subs utilizes technology to train employees, with the goal of developing greater efficiency.

According to Gioia, "It is not only necessary to go digital, it’s a necessity to be competitive in franchising and in the restaurant industry. Digital technology and social media platforms are changing so rapidly, but you shouldn’t wait for the optimal solution. Just get in the game."

"Technology can offer a blended learning approach for training. In person training is great, but utilizing apps for mobile learning, short training videos, online courses and online quizzes will increase employee engagement and the quality of the training program," Valentine said.

Like Valentine, Gioia also believes technology is useful for employees, "For our crew members, it’s a great way to train and be part of the Togo’s family." 

Millennials are the fastest growing demographic and they communicate digitally whether they are guests or crew members, Gioia said. Togo's employs social media because of the numerous opportunities it provides to to engage guests, particularly those of this generation.

Digital video is another method restaurants are using to get out their brand message and engage potential customers. According to Bright Roll's "The State of Digital Video: Quick Service Restaurants" report, digital video can help restaurants convey a variety of messages that not only enhance the brand, but showcase menu items and strengthen connections with consumers.

The BrightRoll research team studied video ads from the top 10 QSR advertisers and found that eight of those 10 used video for branding purposes to promote specific products and build brand preference, loyalty, and affiliation. "The ability to identify specific consumer segments and customize — even personalize — the advertising experience is the key to such connection," the report stated.

Millennials especially are looking for meaningful relationships with brands that are relevant to their lives, BrighRoll said.

The research also states that mobile coupons can draw in fast food eaters; location targeting can convert hungry QSR consumers; and menu information in a mobile ad is the factor most likely to influence restaurant choice.

Restaurant apps allow customers to check menus, pricing, and promotions and can convert additional customers by including directions to online menus, and advertising new menu options and limited time offers, the report said. 

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