During these uncertain economic times, getting back to basics is the key to a franchisor’s success. Shore up your systems; find innovative and creative ways to finance new deals; look for the opportunities in the silver lining; and, most of all, communicate effectively to all of your audiences. Here’s a quick overview of these B-A-S-I-Cs:
“B” is for Best Practices: Reviewing and enhancing best business practices is a simple yet important step in managing during a global recession. Consider forming task forces to develop short-term strategic plans to find ways to reduce costs, and hosting educational webinars to help franchisees reduce costs at the unit level. Our member companies identified supporting franchisees at this level as a top priority.
“A” is for Address Financing Challenges: Consider developing ways to provide direct financing to prospects, such as developing new businesses for the sole purpose of providing financing. Look for new financing partners, including working with local banks instead of the larger institutions.
“S” is for Seek New Opportunities: A business leader sentiment survey conducted last fall by the IFA indicated that many leaders see opportunities and advantages in the down economy. For instance, it might be a good time to focus on conversions, or purchase new brands that focus on existing customer bases or that allow a company to diversify. With enhanced marketing, sampling, and promotions, some franchisors may gain a new customer base among discriminating consumers.
“I” is for Infrastructure Optimization: Now is the time to review current structures and operating systems to make sure there is synergy across the company.
“C” is for Communication: Communicating with your employees, franchisees, and business partners is more important than ever. Hold weekly calls, develop newsletters, and use Twitter to keep people up-to-date on what is going on in the company.
For a good overview of how the current credit crunch is impacting franchise sales and what the IFA is doing to help, be sure to read The State of Franchising in Today’s Troubled Economy.
Dina Dwyer-Owens is chairwoman of the International Franchise Association and chairwoman and CEO of The Dwyer Group.