For Some Franchises Growth Comes from Current Franchisees
When it comes to the development and growth of a franchise system – that is‚ dependable growth through qualified franchisees – too often franchisors ignore their existing franchisees. For franchisors the value of dependable and experienced "existing" franchisees is something that should not be overlooked. The economics of scale and efficiencies obtained through multi-unit franchise sales are well documented and‚ in many instances‚ "just make sense".
Recognizing the significance of this expansion strategy‚ a recent article‚ Popeye's reports on its expansion strategy focused on unit growth through multi-unit sales. Popeye's claims that they have redirected their franchise sales toward current franchisees. According to the article‚ the Popeye's franchise chain yielded a 5.1 percent sales increase in 2010 which was their fourth year in a row for positive annual sales increase and hope to yield similar results for 2011.
While Popeye's strategy sounds promising the article does not discuss franchisee satisfaction and the impact on overall profitability for both Popeye's and its multi-unit franchisees. Certainly‚ information that I would be interested in. For franchisors sustainable and controlled growth is critical and multi-unit sales is one "growth tool" that must be evaluated.
For additional information about franchising your business or improving your franchise practices request a complimentary copy of "The Franchise Formula: A Guide to Franchising a Business in the New Economy" by Charles N. Internicola‚ Esq. or contact our office at 1-800-976-4904.
By Charles Internicola June 29, 2011
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