Meeting the Challenges and Opportunities Your Franchise Brand Faces
Smart management makes an honest and strategic assessment of opportunities and challenges.
The launch of a new calendar year is always a good time to review business goals, milestones achieved and areas for potential growth in the year ahead. Every type of business offers its own range of unique opportunities and challenges, and this is certainly the case when it comes to franchising.
Opportunities and creative ways to implement them are as rich and varied as are the types of franchise businesses, but challenges also abound. A marketing tactic that works for a franchisee in Los Angeles may not be quite so successful in Des Moines. An incentive strategy that is a home run in New York could be a recipe for failure when offered in Berlin or Munich. And then there’s always the ever-present challenge from competition.
Smart management will make an honest and strategic assessment of both the opportunities and challenges in myriad areas that can range from international expansion to store design, from new franchisee recruitment incentives to solidifying relationships with existing franchisees, and from focusing on operational excellence to expanding technology tools and systems.
Authentic, Fresh and Relevant Store Design
As with all assessments, best practices should always be filtered through the sharp lens of the particular brand. What might work for a health and wellness company may not be appropriate for a business in the education space. Strategies that rocket an ice cream franchise’s sales may not apply whatsoever to a tire business. Keeping the brand and its unique characteristics at the forefront of all decision-making will allow a brand to stay authentic to its heritage and design creative ways to stay fresh and relevant to its customers.
Being fresh and relevant for Baskin-Robbins meant rolling out a new store design in 2013. The new design featured “supergraphic” artwork showcasing our brand’s “31 Flavor” legacy juxtaposed with a new brand logo and an updated theme. Other creative touches included digital menu displays and our brand’s iconic pink spoon incorporated throughout the redesign, even in novel, spoon-shaped door handles. Not only was the physical store image updated in multiple ways, we implemented a revived focus on the current franchisee profitability model and rolled out robust, new prospective-franchisee incentives.
Incent Franchisees – New, Existing and Military
Incentives can be a great way to attract prospective franchisees to your system in both new and existing markets. Strong consideration should also be given to franchisees already in the system. Some of the best ambassadors are people already on board: existing franchisees. Driven by a re-energized strategic plan, we have offered them development opportunities for expansion, remodels and relocations. It will be the cornerstone for more than 300 new and remodeled locations in the near future. For new franchisees, Baskin-Robbins implemented an attractive combination of reduced royalty rates and an initial franchise fee amortization opportunity.
The military is another area where franchisors have found a solid talent base for new franchisees. Due to the specific skill set and leadership experience developed during military service, veterans typically find franchising a perfect fit for their next career. In fact, IFA’s strategic initiative VetFran has offered financial incentives, training and mentoring to veterans since 1991.
This past fall, the Franchise Business Review released survey findings which showed that the franchise industry has helped more than 150,000 veterans and military spouses start careers in franchising and showed an increase in veteran-franchise ownership. Baskin-Robbins is one of those companies offering deep financial incentives for military veterans, including waiving the 20-year initial franchise fee and offering significantly reduced royalty rates.
Geographic Challenges and Opportunities
Geographic expansion is another area where franchise owners can realize profitable, scalable growth. By identifying strong pockets of brand awareness and presence, a franchise can identify smart expansion opportunities. Often this includes international growth, which, for Baskin-Robbins, has meant recruiting franchisees to develop the brand in South Africa and Germany most recently, as well as the Philippines and Vietnam in recent years. However, franchise businesses should be certain to seek appropriate support; many franchise rules and regulations vary between different states and countries.
Entering a new market usually means creating a physical presence, but some franchise concepts can get creative, benefitting from brand awareness in markets without an actual store presence. For example, our system enjoys 95 percent brand awareness thanks to its robust nationwide marketing initiatives. Even in markets without physical ice cream shops, we have built brand presence in grocery and convenience stores where our Sherbet Flavored Freezer Bars are now sold. National franchisees still benefit from such channel activities. A portion of the freezer bars’ profit goes into a national advertising fund and the product drives store traffic since the freezer bar packaging includes a coupon redeemable at any of our locations.
Reaching Guests and Franchisees
Creative marketing and incentive tactics are not the only opportunities and challenges for franchise businesses. Management must also keep a keen eye toward opportunities to leverage the latest technology to reach potential guests and franchisees. Constantly reinventing themselves, businesses need to closely monitor their target audience’s pulse by regularly asking:
- How is my customer going to find me?
- Where is my customer spending time?
- What’s the best way to communicate with potential franchisees?
It’s important to ensure you’re visible where these audiences live, work and play. If guests hang out on Twitter, then you should begin to speak in 140 characters and start conversations with them. If research shows Vine resonates with your customers and potential franchisees, then add short online videos in your repertoire. If franchisees are devoted readers of the local business journal, then you need to explore advertising and editorial opportunities there. We realized remarkable success by reaching out to customers, as well as potential franchisees, with a robust and targeted mix of traditional and social media on various platforms, as well as innovative advertising and marketing at both the national and local levels.
It’s a Jungle Out There
Like other businesses, franchise operations find challenges – and opportunities – in the competitive landscape. A brand must understand who else is vying for its customers and be intimately familiar with that competitor’s tactics, successes and shortcomings. In much the same way that a sports coach reviews videos of the opposing team before planning the playbook for the next game or a military commander studies enemy tactics before staging an assault, a smart franchise brand must know its competitor’s business inside and out.
Around 2009, the frozen yogurt trend was beginning to infringe on ice cream market share. To blunt this effect, Baskin-Robbins dug deep to learn what kept guests loyal to the brand and “get the scoop” on the unique characteristics and products they valued most. We were able to leverage our brand’s rich flavor heritage and bring back some fan favorites, while also adding new flavors that tied into current trends. This effort, along with other tactics, such as our new store design, has helped us stay fresh and relevant.
Achieving that perfect balance to meet challenges and capitalize on opportunities can be an elusive endeavor. With an honest and strategic assessment of the entire business landscape, including expansion and growth opportunities, franchisee incentives and profitability, operational and technology considerations, and an accurate assessment of the competition, franchise brands can find their spot and position themselves for future success.
Bill Mitchell is the president of Baskin-Robbins U.S. and Canada, and Dunkin’ Donuts & Baskin-Robbins China, Japan and Korea. Find him at fransocial.franchise.org via the directory.