Slow and Steady Growth Offers Franchise Success
Southern Classic Chicken, a family-owned fried chicken restaurant concept based in Shreveport, LA, recently launched a franchise program after 30 years in business. The brand has learned many lessons, offering suggestions on the advantages of employing a slow and steady growth strategy utilizing the franchise model.
“Been There. Seen That”
Often, we read about a unique, new concept that explodes on the scene and becomes a commodity in franchising. The idea seemingly sells out territory after territory with news of huge multiunit deals and promises of the arrival of hundreds of franchised units. But how many times do the same concepts see their development plans fulfilled? Rarely. The driving factor behind this tendency is a flawed growth strategy that focuses more on franchise sales rather than the opening and support of successful franchise units. The resulting failures of going too fast are not only brand-damaging to the rest of the system but can, in some markets or cases, become fatal to the brand. Said another way, the race is won by those who approach franchising with a “slow and steady” mentality rather than a quick blitz off the franchise sales blocks.
Some Common Mistakes Made by Franchisors Who Move Hastily
Moving quickly can come with a price. Fledgling franchisors who move too hastily become susceptible to common mistakes including the fear of saying “no,” the failure of performing due diligence, and overselling large territories to unqualified developers.
It is crucial to understand that not every prospect is right for your concept, emphasizing the importance to be able to turn deals away. This can be for a variety of reasons from financial or operational qualifications to cultural fit. Failing to define and actively seek the characteristics desired in a franchisee candidate profile can lead to poor sales and tarnish a brand’s reputation. The majority of franchisees fail because they are either not properly capitalized or the franchise location should not have been accepted.
A disciplined franchisor needs to undertake the necessary diligence to confirm the financial status of the prospect and do a real estate analysis of any market before opening it up for franchising. Steering the franchisee to profitable markets and sites that allow for optimal chances of success is necessary homework. Franchisors can often make the mistake of letting the excitement of selling territories consume them. Overselling large territories to unqualified developers, selling territories in “one-off” or distant markets where no brand name recognition exists, and failing to account for the time and expense of supporting these franchisees from afar can lead to failure. We encourage franchisors to employ a slow and steady growth strategy, beginning with entry into contiguous markets and then growing “inside-out.” This model has proven its ability to allow franchisees to not only sustain but exceed their growth goals, in addition to creating brand recognition over time.
Slow and Steady Growth Can Improve Brand Name Recognition
Franchisors desiring to be “best in class” will employ a growth strategy that makes such a desirable opportunity that only a limited number of applicants will be accepted. Generating this demand doesn’t happen overnight but, rather, through long periods of development. By creating a competitive franchise sales environment, the franchisor should attract better candidates. Reciprocally, sophisticated franchise prospects are typically more attracted to a franchise company that can showcase the value of its system through its long-established brand recognition, efficient unit-level operations, and compelling unit-level economics. All of these attributes are developed over time leading to a more attractive offering that draws in qualified applicants.
Pace Makes the Race
There are many restaurant concepts that have come and gone; the operating history of the franchisor illustrates how consumers perceive and react to a brand. Longevity in the marketplace shows the ability to survive, thrive, and surpass any reasonable test of commercial viability, lending further credibility to the brand’s strength. Thus, the importance to deliver quality products at affordable prices in a safe and convenient environment is paramount. Adding to that is the ability to allow franchisees into the system and to provide them with the tools required for them to replicate the franchisor’s success. Southern Classic’s decades-old history of selling fried chicken and complimentary side offerings in its predominantly drive-thru model exemplifies how to achieve such success and do so in any economic environment.
The Slow and Steady Win the Race
Ultimately, I implore you to demonstrate patient, focus, and discipline with your growth plans. Nurturing the confidence that you have in your concept will reflect your ability to succeed. While it may take time, and perhaps even more than originally thought, it’s the winning strategy. The side of the road is littered with those who moved too fast.
Tom O’Keefe is the Managing Director of Southern Classic Chicken, launching the 30-year-old family-owned brand to franchising.