Ensuring adequate support in fast growing franchise opportunities
Nigel Miller | Managing Director | Plus Fitness
Franchisor support is a crucial factor to evaluate when looking at franchise opportunities that you would like to be a part of. This can be particularly the case with fast-growing franchise systems where without adequate support franchisees can find themselves outpaced by challenges brought on by a rapidly changing market environment.
Nigel Miller is the managing director of Plus Fitness, a chain of gyms around Australia that started franchising in 2011 and since then has expanded to over 120 locations across Australia. In this article, he discusses the importance of looking for franchisor support when considering franchise opportunities, and the different ways that a franchisor should support their franchisees.
One of the biggest challenges when looking at franchise opportunities in a fast-moving market is the challenge of staying relevant. A good question to ask is: does the franchisor play an active role in helping the franchisee keep abreast of changes in the market?
Franchises built around trends and fads may do very well initially, but as the market moves on franchisees may face dwindling growth and decreased turn over. Look for franchise opportunities where the franchisor supports their franchisees in adapting to the changing demands of the market, whether through redesigning an existing product, offering new products to sell, or introducing new channels of business such as e-commerce. At Plus Fitness, our core product is fitness and exercise. People will always exercise, and in that way our product will maintain its relevance into the future. However, we still need to spend a lot of effort reinventing and adding to our product to keep up to date with what the contemporary consumer is looking for in a fitness business. Items such as CrossFit, virtual classes and modern exercise equipment are all considered in order to help our franchisees stay ahead of the market.
In any fast growing franchise, supplementing the franchisor’s initiative to help their franchisees with changing market demands should be a strong support network. A key question you should ask is: does the franchise system have an effective network of support staff that can respond quickly to any issues that arise?
"Without adequate support, franchisees can find themselves outpaced by challenges brought on by a rapidly changing market environment."
Keep an eye out for franchise opportunities in which there is regular contact between franchisors and franchisees. Having a support network in place will allow for timely responses in dealing with any issues that crop up, aid in the rapid dissemination of ideas, and may provide a good boost to franchisee morale just with the knowledge that help is always at hand. This is particularly important with franchise opportunities in a fast-paced market where being able to respond quickly to new developments can be invaluable in helping identify and acting upon new business opportunities.
At Plus Fitness, we maintain regular contact with our franchisees with our Field Managers calling their Franchisees at least once a month to assess business performance, plan for the coming month and assist with any challenges they may be facing. In addition to this the Field Managers have a quota of Franchisees to visit each month so there is never too long between visits. These methods of contact provide the opportunity to discuss important matters such as marketing, sales, member retention and human resource management. We also have a network of support specialists at head office for franchisees to get advice on matters ranging from financial planning to town planning, in addition to regular interaction with their field managers.
While there may be adequate franchisor support today, prospective franchisees should also look at the support network’s capacity to grow as you go into the future. Can the support provided by the franchisor keep up with the growth of the franchise system?
In franchise opportunities that go through fast growth spurts, there is the risk that the expansion of the system into new territories and the addition of new franchisees may exceed the franchisor’s capabilities to provide adequate support coverage for the entire franchise system. When considering franchise opportunities, inquire with the franchisor as to what provisions they have in place to expand their levels of support in times of fast growth, the ratio of field managers to franchisees and whether it is sustainable, whether there are any plans to expand support resources at the head office, and whether there are any additional resources that are available to support franchisees. It can also be helpful to ask these questions directly to existing franchisees to get an on-the-ground sense of the situation. Usually when looking at franchise opportunities the franchisor provides a list of franchisees that you can call to inquire about the business. This is a very helpful resource, but it might also help to call franchisees that aren’t on the list by getting their details directly off the web. Ask after whether they are happy, whether they are making a good turn over, whether they have a good relationship with the franchisor, and whether the franchise model works.