The following excerpt is from franchise expert Mark Siebert’s book The Multiplier Model. Buy it now.
Let’s start with a basic premise: Almost any business can be franchised. After all, there are franchised medical practices ranging from urgent care clinics to optical centers to dental practices.
Entrepreneurs have franchised businesses as complex as the high-end restaurant Ruth’s Chris Steak House and hotel chains like Hyatt and Sheraton, which sometimes operate almost like small cities. Conversely, carpet-cleaning and lawn-care businesses like Chem-Dry and Spring-Green have much simpler operations and lower startup costs.
So a business certainly does not need to be simple to be franchised—but it helps.
Replicate by keeping it simple
A fundamental premise behind the Multiplier Model is that your business must provide returns without your direct involvement. So as you begin replicating your Money Machine, you will need people other than you operating the new locations. And because chances are that those people are less qualified and less motivated than you are, simpler systems will always be easier to follow and will allow less room for improvisation.
Simplicity keeps your people options open
A major drawback of more complex franchise models is that they shrink the target market of franchisees who could be recruited to run the business. Medical franchises, for example, need to recruit licensed healthcare professionals as franchisees or employees. High-end restaurants need restaurateurs with extensive experience to run the business profitably. Hotels, especially more extensive and more complex ones, must often be run by management companies rather than by owner/operators.
By contrast, think about Subway. An average restaurant might be 1,200 square feet. It does not have any grills, deep fryers, or grease traps. It is a simple assembly line for making sandwiches to order and serving drinks. A Subway restaurant can literally go into just about any strip mall in the U.S.—and sometimes it seems as if they have, with some 22,000 U.S. locations (and a total of about 40,000 locations in more than 100 countries worldwide).
Related: Tips and Strategies for Using the Balance Sheet as Your Franchise Scorecard
Don’t make it so hard to deliver quality
Aside from the issue of the franchisee selection process, the simpler the business model, the easier it is to control quality. If a 20-foot sandwich prep line has 40 different ingredients in its drop-in dividers, then there are only so many things that can go wrong in the food preparation process. And if the customer is watching every step of the way, presumably those issues can be resolved before they have a bad experience with the product.
Keep in mind that more complex restaurants like McDonald’s are among the most successful franchises in the world, and even more complex restaurants like Ruth’s Chris are highly successful. But take, for example, traditional Greek restaurants with their extensive menus that run for many pages, and you see few players that have successfully franchised in that space.
Simplicity remains true beyond the restaurant industry
Outside the restaurant industry, you can see the same trends in many different markets, with franchised businesses dominating industries with simple business models:
- Janitorial-services businesses. Between ServiceMaster Clean, Jan-Pro Cleaning & Disinfecting, Coverall, Vanguard Cleaning Systems, CleanNet USA, Anago Cleaning Systems, Stratus Building Solutions and Buildingstars, there are more than 27,000 franchisees in this industry — and more join the market every year.
- Carpet-cleaning companies. Companies like Chem-Dry, Oxi Fresh, Stanley Steemer, milliCare and COIT have sold thousands of franchises in this space.
- Lawn-care businesses. This is another simple business model dominating the market by franchising, with companies like Lawn Doctor, Spring-Green Lawn Care and Weed Man leading the way.
Related: How to Finance Your Franchise
Don’t let simplicity scare you
It may sound counterintuitive, but you do not need a novel and/or complex product to be successful. A simple product or service, like Subway’s sandwich assembly (and Subway did not invent the sandwich), will help you expand your business by training franchisees from various vocational fields and delivering consistent results. At the end of the day, it is about keeping your customers satisfied, and people tend to love the simple things in life.
Get started with The Multiplier Model
Going from small business to successful startup to scalable growth takes more than good luck. It takes a system. Over the last 34 years, franchising consultant and growth expert Mark Siebert has been sought out by more than 70,000 executives looking to expand their companies. Out of those 70,000, only 5,000 had the right systems in place to go from successful to scalable. In The Multiplier Model, Siebert discusses the factors that determine if an entrepreneur is ready to scale their venture — and the best ways to get started. Read more.
