Franchise systems have various life cycles and require time to mature and develop the necessary systems and infrastructure to expand. For franchisors‚ many times‚ the biggest strain on their franchise system relates to and is traced back to an overambitious rate of expansion. While there are many considerations‚ motivations and good reasons why your should be aggressive about unit growth‚ you must nevertheless proceed with extreme caution and evaluate whether or not your systems are capable of supporting your planned levels of expansion. Some factors to consider‚ include:
- The current location of your franchisees and whether or not expansion should be reserved and limited to designated geographic locations;
- The capacity and capability of your supply chain and whether or not you have lined up the necessary vendors to supply your franchisees and maintain the necessary levels of quality control;
- The capacity of your management and marketing team and your ability to maintain consistent levels of quality control‚ franchisee development and overall system development;
- Whether or not your internal in-house legal counsel or outside franchise attorneys have implemented clear quality control measures respecting the delivery of your FDD‚ the management of your franchise agreements and the constant assessment and protection of your trademarks and intellectual property.
Great franchise systems do not need to be large – they just need a coherent plan and sustainable plan for system growth and a management team committed to quality over quantity.