How to Position Your New Business for Future Franchise Success

So you want to start a business, but you don’t want to open just one or two locations. You envision turning your business into a franchise and can’t wait until it becomes a household name. But making a name for your business can be challenging, especially in franchising sectors that are already oversaturated with competition.

“The key to building a good franchise system is to create systems and processes that allow franchisees to replicate your business,” says Christian Faulconer, CEO of Franchise Foundry, a franchise development firm, who estimates that fewer than half of his clients started their businesses with the intent to franchise. “Those systems and processes are valuable to a business regardless of how the business plans to grow - whether through franchising or corporate growth.”

So before you jump in headfirst and start envisioning national – or even global – expansion, get a head start by making sure that the foundation of your business has the capability to take you far.

1. Make sure that your concept offers something unique. The best way to stand out is by offering something that the rest of your competitors don’t. Elevation Burger, a franchisor based in Arlington, Virginia, garnered attention with its 100 percent organic focus, while Yogurtland, an Anaheim, California-based franchise concept, attracted interest by pioneering the self-serve concept in the frozen yogurt sector. “In order to have a successful business you have to have soul, you have to have your own ideas, and you have to be innovative,” says Hans Hess, founder and CEO of Elevation Burger.

2. Do your homework. Great ideas don’t come out of thin air. Make sure you do your research to confirm that you have a viable franchise concept. “Back in 2002 when I first had the idea for Elevation Burger, I did a lot of research,” says Hess. “We did a large-sample, statistically rigorous survey in order to get an idea if we were headed in the right direction. Then we built the brand on that foundation. We spent a year in the test kitchen defining and testing the menu.”

3. Test out your idea. Yogurtland founder Philip Chang didn’t just come up with the idea of a self-serve frozen yogurt concept and immediately decide to launch it. Instead, he tested the format out for a year in a Boba tea business that he founded in 2001 called Boba Loca. The year-long trial indicated that the concept had legs, and Chang opened the first Yogurtland location in 2006. The franchise has grown to more than 100 locations with projections of more than 550 locations by the end of 2015. “Yogurtland capitalized on the growing popularity of frozen yogurt and took it to a new level by introducing self-serve,” says Larry Sidoti, vice president of development and operations for Yogurtland. “This alternative delivery style introduced a new, interactive element to the category.”

4. With success often comes competition, so be prepared to fight to stay ahead of the curve. Competition has intensified for Yogurtland as others, including TCBY, have adopted the successful self-serve model. Meanwhile, Elevation Burger also reports having to fend off copycats. “It is important not to rest on your laurels because imitators will see your success and try to replicate it,” says Faulconer. “You need to continue to innovate to stay ahead of the competition.” Yogurtland continuously invests in research and development to improve its flavors, while Elevation Burger has plans to introduce a new way of cooking food and serving guests.

5. Develop a solid brand. “Franchisors looking to distinguish themselves from well-established competition should focus on their brand,” says Faulconer. “Most companies are good at presenting the brand in their marketing collateral, but a strong brand will go beyond collateral and will be reflected in the way customers are treated, the way franchisees are trained, and the way vendors are dealt with.”

6. Focus on the basics. Don't quite have the guts to revolutionize the industry with an entirely new product or concept? Sometimes you can create the biggest splash simply by perfecting the smallest details. “While it is nice to have a distinct concept or product, sometimes it is risky to do something completely new,” says Faulconer. “It might be safer to launch an established concept or product in a unique way. If your product or concept is not particularly unique, focus on doing what you do better than the competition.”