FIVE LEVERS METHOD
The key success factors of a franchise network must work with five relevant parameters, also known as
Assess the Profitability
Engineering of the process
Research & Development
The brand is the first fundamental step to set up the franchising network and be successful. It carries out the corporate’s image, values, and ethics. It makes quality and corporate's characteristics immediately recognizable
ENGINEERING OF THE PROCESS
The engineering of the processes is the base of the proper functioning of a franchise network.
All the operations must be tested and standardized while the costs should be easily computable.
Moreover, thanks to the engineering of the process it is possible keeping the control of all the chain stores, thus ensuring the quality of service and higher management efficiency.
The franchisee is the sales rap of the franchisor in a specific area.
Hence, careful training provided by the franchisor to the fanchisee and its employees is crucial. The training aims firstly to share and pass on values, mission, vision and, further, teaches the business operations.
Thus, realize the importance of appropriate training is crucial to organize and properly build a long-lasting relation between the parent company and its affiliates.
RESEARCH & DEVELOPMENT
Meanwhile, the franchise network takes the distribution channel role, the parent company handles with collecting data from the affiliates about the market needs, commercial issues and thereby develops new solutions and commercial offers.
The research and development activity are crucial to anticipate the customers' needs and forecast potential issues.
ASSESS THE PROFITABILITY
Since you run franchising, you are asking someone else to invest in your business, even if he doesn't know you. The potential investor, at any expertise level, will assess the risks-return ratio. As a result, the business must be set up as profitable and durable.