The DNA of Success: 3 Qualities of Top-Performing Franchisees

What is a Top-Performing Franchisee? What do you have to do to become one? Here at the American Franchise Academy, we define them as successful franchisees who have large organizations that consistently increase sales year over year, show rapid unit growth, and achieve high profits. They are also great leaders, have a strong business culture, and demonstrate longevity, meaning they are the brand legends. 

For those reasons, they are award-winning franchisees and have a place within the hall of fame if they are part of a legacy brand.

During my corporate years in franchising, I worked primarily with legacy brands such as Domino's Pizza, Popeyes, and Darden Restaurants, and every franchisee wanted to know everything that these top franchise owners knew, so they could achieve the same impressive results and operations excellence.

Over the years, I have determined three qualities that these men and women have in common, which I’m going to share in this blog post. Evaluate yourself against the characteristics of high-performing franchisees and identify the aspects you need to strengthen to become one and achieve this level of performance.

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1. Clear distinctions 

Top-Performing Franchisees have clear distinctions about their business and what they invested in.

They know what you get and what you don't get when you buy a franchise, which is what I call the biggest secret in the franchise world, because a lot of people get into franchising thinking they will get everything they’ll need to be successful, and that is not the case.

What you actually get is the brand systems that the franchisor has created around a proven brand, allowing you to generate revenue, which is the oxygen of the business. (By the way, “proven” means that they have confirmed that, if executed well, people are willing to give you money in exchange for that product or service.)

However, they never guarantee any type of profit. To achieve this, you need effective business systems to manage the business, allowing you to then make it profitable.

These successful franchises also have the distinction that, depending on the maturity of the brand, they may or may not have enough sales at the beginning. If it is a startup or an emerging franchise brand, you're going to have fewer sales when you open than you will in a mature or legacy brand, and it is very important that you have this distinction.

Keep learning: The Biggest Secret in Franchising

2. Clarity

Another thing that top-performing franchisees do differently is have clarity on how the franchise model works. They know that the franchisor provides the brand systems, which include:

• The product or service that they are offering to their customers.
• The service process to deliver the product or service. 
• The image, which contains everything that people see, touch, smell, and experience through their senses, and creates the brand experience. 
• The marketing to promote the brand. Again, depending on the maturity of the brand, franchisees might get regional or national marketing to increase sales, or just brand recognition campaigns. 

This is exactly what franchisees invest in when they buy a franchise: a set of processes, procedures, and policies that will bring consistent results. 

Franchise brands are able to successfully scale their own units because they have established and followed these systems. You receive these systems from the franchisor through an operations manual, training materials, and job aids. It is the franchisor's responsibility to maintain, support, and innovate these systems so that their franchise units can maintain continuous sales.

The other side of the franchise business is the business systems, which include:

• The Team systems, designed to hire and retain great people.
• The Income systems, needed to increase sales year over year in your business.
• The Profit systems that will ensure the financial model is profitable.
• The Scale systems that will help you become a multi-unit franchisee.

The creation, development, and maintenance of all these business systems are the responsibility of the franchisee, and top franchise owners have that clarity. They know what they get, what they don't get, and what they're responsible for as the paramount process for their franchise success.

So, they define what those systems are, document them, and then train their team on them, so they can delegate the operations to them, and then just follow up.

Franchisors followed the same procedure. They have defined and documented their brand processes and train their franchisees on them to delegate the operations of a franchise unit. You'll need to do the exact same process for the business systems. 

These successful franchisees also have clarity on their investment, and they understand that they have to invest every day and every month to have proven brand systems. The franchise investment in a brick-and-mortar business typically includes:

• The franchise fee, that is usually anywhere between $10,000 and $30,000. 
• The acquisition expense of approximately $250,000. 
• Monthly or weekly royalties that go from 4% to 7%.
• Marketing fees that could be up to 4% of sales.

They also acknowledge that they have to invest in their business systems as well, not just in terms of money, but also in time and resources, to have great people, produce sales growth year over year, to turn their revenue into profit, and to scale so they can achieve time and financial freedom.

Go deeper into the four systems that franchisees need to create for their franchise business

3. Responsibility

Successful franchisees take responsibility for the knowledge and skills that they lack. While the franchisor teaches how to manage the franchise unit brand operation, providing training materials and an operations manual, along with annual conferences, guidance, support, and unit visits, there is very little training for multi-unit business ownership and management.

Again, that is the responsibility of the franchisee. Top-performing business owners understand where they stand and take action to change whatever needs to be changed.

And I will tell you: they did not figure it out on their own. They reach out to online educational programs, fellow franchisees, coaches, or mentors for guidance on business management, knowing that this would accelerate their learning curve.

The American Franchise Academy is one of those resources. We have been helping franchisees get the knowledge, the tools, and the resources to be successful since 2016. We help franchisees know exactly what they have to do to achieve their goals, make decisions with clarity and confidence, and to be able to go on vacation without worry because the business will continue to operate properly.

We want them to be able to make every one of their units profitable, and grow into a multi-unit enterprise with success. 

To do that, we created a development ladder that focuses on the business acumen and the business systems that franchisees need to implement to successfully and profitably run their business and grow it. 

• The first step of that ladder is MANAGE, a Unit Management Program designed for shift leaders, assistant managers, unit managers, and single-unit franchisees. This program is divided into basics and advanced classes, teaching leadership and management skills to run a profitable franchise and thrive.
  
  If you're a single-unit franchisee not expecting to grow anytime soon, or you run a shift and want to secure a career path within the franchise industry, these are the two programs that you definitely should be looking into. 

• The second step is LEAD, the Multi-Unit Leadership Certification Program, a 10-week program designed for those who are about to be promoted to the District Manager position, existing District Managers, or Multi-Unit Franchisees who supervise their own stores. 
  
  
• The last step is COMMAND, our Multi-Unit Franchise Ownership Certification for new franchisees, growing franchisees, and Multi-Unit Franchisees. This training program is designed for owners who have an enterprise that is currently growing or is expected to grow in the future.
  
  That's our signature program, and there is no other like it. We focus 100% on tactical and practical systems, processes, procedures, templates, tools, and knowledge, ensuring that we provide franchisees with the things that the franchisor does not and cannot provide, so they can fill that gap, be in command of their business, and achieve success as Top-Performing Franchisees.

If you are interested in any of these programs and want to learn more about what we teach, how we teach it, and the outcomes you can expect, visit our Programs Website or Events landing page to register for our upcoming information webinars.

We would love to welcome you into our programs and help you in your journey of becoming a successful Top-Performing Multi-Unit Franchisee!

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