What does a successful franchise lifecycle look like?
If you are thinking about starting up a franchise or you want to fine-tune the processes of your existing franchise, you’ll need to be familiar with the stages of franchise growth. As many business owners have found, diving into the world of franchising allows businesses to branch out and grow. It also allows entrepreneurs and small business owners to run their operations under a “tried and true” formula. Running a successful franchise has unique advantages, but it also has unique challenges. Scorpion can help you overcome these challenges, and we are here to guide you through every stage of the growth process. Although this can look a little different for each business, the following cycle is the one we see the most:
The beginning stages of your franchise venture are known as the “start-up” stage. During this stage, you will find a venue for your business. As you probably know, it’s not as simple as driving down the road and picking the first building with a “for lease” sign. You will need to research the development in the area and become familiar with the demographics of your potential customers. This will allow you to position your franchise in a location that will allow it to thrive.
At this stage, you will also get to know the key players of your franchise and what your roles and responsibilities will look like. One of the best parts of starting a franchise is the support you will receive in terms of the business assets, systems, and existing operations. You will also build your budget and figure out how to finance the operation. If you have experience in this area, then you know that starting a franchise will most often require heavy investments to cover things like starting costs and payroll. Don’t let this discourage you! Every franchise has to start somewhere, and before you know it, you will be moving on to stage number two.
Stage two: the growth stage
The franchise magic doesn’t necessarily happen overnight. Most franchises hit their growth stage around the two-year mark. This is less time than it takes for an average start-up to hit the growth stage, which is typically around year three or four. Because you are likely operating under a brand name that people are familiar with, and you already have key processes in place, you might see this stage arrive even sooner.
At the growth stage, you will likely have a strong customer base and you will be starting to cover your overhead costs, which means profits are on the way. If you are considering opening multiple franchises, this is typically the time when owners pursue those options further. Otherwise, you might consider taking on more employees to help scale your business or increasing marketing efforts.
The key to staying on an upward trajectory once you hit the growth stage is to adapt. Hopefully, you will be able to delegate day-to-day responsibilities and focus on larger aspirations. This means monitoring your finances, spotting growth opportunities, and setting clear goals for the future.
Stage three: the maturity stage
When your franchise reaches the maturity stage, it is quite an accomplishment. This means that operations are running smoothly and you are likely making a comfortable profit. While you should certainly take a moment to appreciate how far you’ve come at this stage, that does not mean that the most successful franchises become stagnant here. This is a key stage for market research. To stay ahead of the curve and make sure your franchise remains on top, look at what your competitors are doing. Are there any benefits they offer that your franchise does not? Keep an eye on industry trends and keep your franchise current.
At this stage, a marketing team like Scorpion can also help introduce your franchise to audiences who might not be familiar with you yet. Word-of-mouth marketing will only take you so far, and you want to make sure you have a strong strategy in place to spark a franchise fire that burns for many years to come. On the other hand, some franchise owners might consider taking a step back or even selling at this stage. When your franchise has reached this maturity stage, you are likely to see interest from potential buyers. Of course, take heed when considering these offers. Scorpion is here to help you make sure your efforts pay off in the long run.
Stage four: the renewal or decline stage
Stage four is the long-awaited outcome of your years of work: will your franchise continue to grow, adapt, and succeed, or will it fall the way of Blockbuster and decline? Of course, some factors are out of your control, such as the economic climate and other extraneous trends. Most businesses will have some years that do worse than others, so if this happens, don’t assume that you’ve hit the decline stage. Instead, it is time to hit the ground running and ask yourself the important questions. Have you expanded or diversified where necessary? Is the industry changing and have you kept up with those changes? Is your technology up to speed with what your customers expect? What about your competitors? If you have been analyzing all these factors up to this point, you might never hit the decline stage. Instead, you might see continued renewal and steady growth for your franchise.
Scorpion wants to help ensure that your franchise never hits that decline stage and that you only see renewal for many years to come. We are dedicated to helping you scale and brand your digital presence so that you can drive more revenue and never fall behind on the latest industry trends. We offer website management, search engine optimization, listings management, reputation monitoring, social media management, and more. In other words, we have the tools you need to help your franchise generate more revenue and continue to serve the customers who rely on your services.
We are proud to help franchise owners run their best businesses with marketing strategies that truly work. Contact us today to learn what a partnership with Scorpion can do for your franchise.