What Top Performing Franchises Have In Common

In Short

• • Successful franchises share traits like strong branding, innovation, and excellent support.

• • Strong relationships between franchisors and franchisees are crucial for long-term success.

• • Reasonable and transparent fees enhance both franchise profitability and network growth.

Tips for Businesses

Focus on building a recognisable brand, offering something unique, and providing ongoing support to your franchisees. Cultivate strong, respectful relationships, and ensure your fees are transparent and fair, delivering value for both parties. These traits will help position your franchise for long-term growth and success.

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Table of Contents

• A Strong Brand
• A Point of Difference
• Ongoing Support and Training
• Strong Franchisor-Franchisee Relations
• Reasonable Fees
• Key Takeaways
• Frequently Asked Questions

Successful franchises typically achieve early success, showing consistent growth and a strong culture of compliance. This approach can even open doors to markets beyond Australia. In contrast, other franchises may encounter challenges, often worsened by internal problems such as non-compliance and inconsistent growth. Although there is no guaranteed path to success, the most successful franchises tend to share certain key traits. This article outlines the top five qualities to adopt, giving your franchise the best chance of thriving.

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A Strong Brand

Think of some of the world’s most recognisable fast-food franchises. Chances are, the first thing that comes to mind is their logo or a specific colour. A distinctive image creates a lasting impression on customers. Successful franchises have a clear branding strategy and know how to implement and protect it, both within and beyond the limits of the law.

Smart franchisors register trademarks such as:

• logos;
• slogans; and
• business names.

They also monitor potential trademark misuse closely. This protection ensures that franchisees retain the exclusive right to use the brand.

A Point of Difference

The most successful franchises offer something innovative—distinctive products or services that set them apart from competitors. This could be a secret recipe for a dessert or a unique service delivery approach. For a franchise network to grow, its offerings must capture enough customer interest and demonstrate clear value, encouraging repeat business. The top franchises either identify existing demand or, in some cases, create it. A great example is the Jim’s Group, which began with gardening and landscaping services and expanded into unexpected areas. Franchisors often generate demand by branching into new sectors, capitalising on their established reputation and branding.

Innovation also extends to how a franchise delivers its products or services. Leading franchisors ensure they excel at what they do. Take courier franchises, for example. In a crowded market, those with the largest market share typically offer the best customer experience, faster delivery times, or lower prices for the same quality of service, giving them a competitive edge.

Ongoing Support and Training

Strong franchisors understand that educating and supporting franchisees goes beyond the initial training program. One key advantage of buying into a franchise is gaining access to the franchisor’s established systems, processes, and expertise.

Many franchise agreements give franchisors considerable flexibility in how much ongoing support they provide to franchisees. Exemplary franchisors prioritise the overall health of their network, setting up systems and processes to ensure continuous support. Franchisors must recognise when additional one-on-one assistance is needed.

Prospective franchisees often speak with current franchisees before committing. The franchise network is more likely to grow if current franchisees feel well-supported and satisfied.

Strong Franchisor-Franchisee Relations

Franchises with solid relationships between franchisors and franchisees generally perform better. When franchisors proactively resolve issues as they arise, they build loyalty and commitment among their franchisees. This satisfies franchisees and helps prevent minor problems from escalating into costly disputes.

Reasonable Fees

Profitable franchisees enhance the brand’s reputation and support the network’s growth. While franchisors must ensure that their fees cover operational costs and provide a profit margin, this should not undermine the franchisee’s ability to maintain a profitable business.

Fees should also deliver value. For instance, if a franchisor charges fees for a marketing fund, franchisees will be more willing to pay if they know the franchisor has a proven track record of effective advertising that increases the franchise’s visibility, attracts customers, and boosts revenue.

Key Takeaways

Top-performing franchises share several key characteristics that set them apart from the rest. A strong, recognisable brand, a unique point of difference, and a commitment to ongoing support and training are essential for success. Equally important are solid and respectful relationships between franchisors and franchisees, built on trust and open communication. Additionally, reasonable and transparent fees benefit both parties financially, promoting long-term growth and profitability. By adopting these traits, franchisors can position their networks for sustained success, giving them the best chance to thrive in an increasingly competitive market.

If you have any questions about setting up a successful franchise, our experienced franchising lawyers can assist. As part of our LegalVision membership, you will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today at 1300 544 755 or visit our membership page.

Frequently Asked Questions