Explosive Growth… good or bad?

On the face of it any franchisor would want to add 150 franchisees to their network in a year.

But is it really a good thing?

Certainly for a franchisor there’s lots to be said for the 150 x franchise fees coming and to say you have a network of 150 franchisees is positive, too.

But there are inherent dangers in growing so quickly.

To start with, let’s go right back to the essentials of franchising.

When a business makes the decision to build a franchise network there is an essential leap to be made. The leap is from delivering a particular product or service to becoming a business that has franchising as its product.

One of the fundamentals of this decision is that your one goal in life now is to make your network successful rather than your own pilot operation, although, in effect, it’s one and the same thing because your pilot should run as a franchisee.

So, the danger of explosive growth is laid bare to us.

If 150 franchisees are recruited in a year they have to be trained and supported so each and every one of them has the ability and the opportunity to be successful.

This isn’t an impossible task if two things happen.

Firstly, the initial training and documentation must be right. Of course, a franchisee must have the ability to deliver the product or service but they must also (as I’ve said many times) be able to run a business. It is the franchisor’s responsibility to ask the ‘what if I’m not here?’ question… that is, if I’m not here have I done everything in my power to ensure a franchisee can run a successful business on their own?

Secondly, a franchise that is growing from a standing start to 150 franchisees must have a support function in place that is ‘ahead of the curve’. Okay, I know that sounds like management bull… let’s just say management speak, but it’s absolutely true.

Too many times have I seen a franchisor recruit lots of franchisees and have only one person to support them and then have to recruit, train and develop a team in order to play catch up.

If a franchisor has the capital resources to invest in initial training and a support function, then 150 franchisees a year is a good thing.

If they don’t I can tell you what will happen… the business building training won’t be enough and franchisees will get off to a slow start, which means they’ll complain and leave the network. It also means they’ll use the support function more, putting it under increasing pressure and so they’ll feel short changed there, too.

This means that year two recruitment will fall dramatically because potential franchisees who are ringing round to get info about the network won’t get a positive story.

Finally, I have to say, as a potential franchisee, I would be worried if my franchisor was recruiting at such high levels…

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