Acquiring the representation of a BRAND through a franchise is a difficult decision and more so when it comes to a food and beverage business where there are innumerable factors to achieve the expected success; Acquiring a brand that offers us a shipbuilding business -and not a manufacturing business- with a supply chain that guarantees us opportunity and margin, with a state-of-the-art technological management system, will allow the franchise owner to manage the business of a more efficient way, and eventually become a multi-unit operator.
The success of a franchise model lies in achieving financially successful, multi-unit and long-term operators so that they are part of the system for many years and pay us royalties for a long time. If we do not structure the model so that it can be standardized, easily transmitted and controllable, and we provide the units with support programs and adequate and sufficient attention to make this happen, the model will be doomed to failure in the short term, affecting inevitably to the brand, its owner, its suppliers, its collaborators and therefore the final customer. If we are not willing to do the homework, it would be better to look for another growth format that is not the franchise.
Growing through the franchise format or as it is commonly said, “Franchise the business”, is not easy for the model or for the owner. The owner (be it a person, a family, partners or a corporation) must be willing to institutionalize and carry out a transformation of the operating and management model, until they have shipowner points of sale, turning them into selling points of sale, not cooks and, of course, not in food manufacturers with large and complicated kitchens, even sacrificing the presentation and taste of the same product for the benefit of growth, standardization and operational simplicity.
There are companies that, without proper preparation, license you a brand so that you can operate it under the franchise format, but that turn you into a full-time buyer, a full-time Costco customer, a full-time cook and a full-time caretaker of the business, before the difficulty of generating profits with a model of this nature. “You go to the Oxxo to buy everything, put everything in the blender and do the whole process yourself”, with which they sell you a kitchen with all that that implies: making things, which requires great attention from the owner and its staff, requires extensive and constant training and supervision, and in many cases, with a higher level of specialization. This causes two very dangerous factors to appear in the business, the first is the difference in the products in the different units, that is, they are not standardized, and the second, control, we totally lose control of the product that is being manufacturing at the point of sale.
When acquiring a franchise, we acquire the license to use the brand, but we also acquire the right to transmit the know-how that allows us to manage the business in a similar way to the owner of the brand, reproducing its success. A shipbuilding business model will allow to transmit this knowledge in a more agile and more expeditious way to operate in the shortest possible time, and that, in the event of a change of personnel, the process and training time will be more effective.
Julio C. Morales, founder of the Crepelandia franchise and vice president of young franchises of the Latin American Franchise Institute, in an interview for The Leader’s Formula mentions: “A creperie would have flour, milk, egg, sugar, etc., all separately to make the dough, it would have the Nutela in the Nutela jar, it would have all the inputs separately and nothing standardized, nothing controllable and nothing auditable, that would be a creperie. In Crepelandia we offer a crepe maker as a franchise where we already send you the powdered flour in 2,200 kg bags, you only put water in it and 35 crepes come out, everything is in single-dose with the exact weights and that makes the operation less complex for that almost any job profile can do it; and becomes highly controllable and remotely auditable by the owner through our ERP that is always online”
The objective is to achieve a business model that can be audited through proper management and hand in hand with the correct technology, today there are many technological tools with which we have to help and that give us the peace of mind of having data in real time from the cell phone and have control of the point of sale in voice, video and data, not the other way around, living from what the point of sale wants to tell me and send, when he wants to send it to me and managing the past in instead of being able to take immediate actions to provide feedback on the operation on a daily basis. Not having a management system based on technology that allows the owner to be in control of the business at all times will make us dependent on the point of sale.
Héctor Alcalá, a specialist in the HORECA sector with more than 35 years operating international fast food franchises, mentions that “points of sale must be full-time sellers of products and experiences.” If you do not want to be a full-time buyer, with which you will not have time to focus on generating brand value, you should look for models that have the supply chain and inventory control resolved by selecting professional and reliable suppliers that, through a Commissariat send us portioned and controllable supplies.
In conclusion, we have two extremes: on the one hand, a business where we are full-time buyers and manufacturers, on the other hand, a business where they send us the product already processed, a standardized, technical business that can be controlled from my cell phone in real time. In this way, the owner will be able to control his business and will obtain the promised results when the franchise was sold to him and will grow under the protection of our brand; In the end, this will lead us to have a solid brand with solid and enduring partners over time, achieving a strong brand, recognized and appreciated by the client.
Your friend the Tsar of Franchises says goodbye to you, see you in the next one.
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