PE Profit Ladder Articles
How Much Franchisee Profitability Is Enough?
Sustainable franchise system growth is rooted in franchisee satisfaction. But how much franchisee profitability is “enough” to attract your ideal franchisee and grow your brand? What return on investment? What lifestyle? Should you reverse-engineer your model to ensure maximum franchisee satisfaction?
The Covid Narrative Will Impact Franchise Sales For The Next Decade
Franchise disclosure document update season is here again. Last year, COVID-19 impact data was still relatively fresh, and the pandemic’s trajectory was unclear. We now have two full years of data. Did franchises reinvent, demonstrate resilience and grow? Stall out or decline?
Expansion By Existing Franchisees Is Vital To Creating A Valuable Brand
When I was a kid, coming home from school with any grade below an A was, well, bad. It was also pointless to tell my dad, “But I studied!” He would calmly reply (cue deep, Midwestern voice), “That may be true, but your grade signals you still haven’t mastered the material.”
When Done Right, Franchise Resale Programs Support Development
A well-orchestrated resale program is an important component of your growth strategy. Sound counterintuitive?
If Disruption Is Our ‘Forever Normal,’ Recruit Resilient Franchisees Now
Why do candidates want a franchise? What are their desired outcomes? “How” things get done will evolve over their 10-plus-year license agreement. Pressure test their assumptions and beliefs to ensure their “whys” will endure.
In Franchise Development, Build Your Brand Fortress As Fast As Possible
Achieving 100 open units is the first major proof of a potentially viable—and valuable—franchise. That’s why brands race to get there fast. Then the effort shifts to opening 250 with a backlog, branching out internationally, then 500 open with a bigger backlog, and so on.
You’ve Just Completed A Franchisee Survey. Now What?
The two main indicators of a high quality franchise brand are: (1) strong unit level economics, and (2) strong franchisor-franchisee relationships. Completing a franchisee survey signals that you actually care what franchisees have to say.
Multi-Unit Development Requires The Right Discipline
Multi-unit development agreements, aka MUDAs, are a common growth tool. But since only 15 percent of U.S. systems grow beyond 100 units (per FRANdata), it’s not as simple as signing a bunch of deals.
Strong Real Estate, Construction Practices Matter For Franchise Growth
Want more growth? Open every unit you sell. Only one-third of new franchises sold actually open. Prior to COVID, there was a backlog of more than 14,000 sold-not-open, or SNO, units in the U.S. according to FRANdata. For many brands, improved real estate processes and get-open support are needed to turn these numbers around.
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