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NationalFranchiseAssociation.com

Franchising Problems and Solutions to Overcome Them

Franchising: Turning problems into profits, one solution at a time!

Franchises are also facing the big problems caused by the current economic situation, just like other businesses. Franchise brands’ challenges in 2024 include rising client demands, high prices, and difficulty recruiting. Although purchasing a franchise could result in a fantastic opportunity, entrepreneurs must overcome a certain set of difficulties.

Franchise management frequently faces a variety of challenges so for that we’ll talk about some achievable strategies that company owners can use to get beyond them. Franchise owners may effectively cope with the challenging environment of their sector and guarantee the success of their companies by being aware of these potential risks and having practical solutions. 

In this post, we discuss the main Challenges faced by franchises as well as the steps that franchise executives can take to seize the opportunity presented by these difficulties.

Table of Contents

Do Franchise Owners Face Challenges?

challenges face by franchise owners

Yes, franchise owners face a number of challenges, including:

5 Challenges Faced by Franchises

Buying a franchise means investing in a company that offers a well-established brand,

tried-and-true operating procedures, and other beneficial supports. Even said, there are still some aspects of launching a franchise that require no additional work, and it’s not always that simple. It takes labor to start a new franchise, just like any other new venture. Furthermore, the majority of new franchise owners will probably encounter the challenges faced by franchises along the way to success. Let’s discuss the challenges and their resolutions faced by franchises below:

challenges-face-by-franchises

Maintaining Franchise Brand Consistency and Quality

Franchise companies can find it difficult to uphold brand consistency given their extensive network of regional, national, and/or worldwide locations. It’s possible that certain franchisees aren’t upholding the brand promise as frequently as the corporate office would like, which could be detrimental to the brand as a whole.

The fact that consumer opinions determine how brands are perceived in today’s feedback economy adds to the problems faced by certain franchisors. After all, ninety percent of consumers say that reading online reviews is very important when making judgments on what to buy.

Franchise brands face the danger of losing control over consumers’ opinions and being ignorant to the valuable insights that can be extracted from online customer feedback if they are unable to handle online customer feedback, such as reviews.

Resolution

In order to gain more control over consumer impressions, you require a technological solution that can handle online customer feedback. Your selected technology should, at the very least, allow for large-scale review request and response processing.

By enabling your franchisees to ask for reviews and connect with the “silent but happy majority,” whose favorable perceptions of your company grow over time, you can build trust with prospective clients and improve your position in Google’s local search results.

Asking for feedback is only half the fight; you also need to respond to it with the goal to show your clients that you value their experiences with your company and are actively seeking ways to enhance both your offerings and services.

Of course, reviews are just one type of feedback. In addition to social media comments, digital surveys are rich sources of feedback that need to be monitored to maintain the online reputation of your business.

Wise brands understand that customer feedback is essential to their expansion, and they provide themselves with the tools necessary to handle it from any location. Make sure your franchise has the technology required to handle the growing volume of online reviews from customers.

Fierce Franchise Competition

Franchisees must set themselves apart from their closest rivals in order to attract clients and stay ahead of the competition. This usually happens through marketing and advertising initiatives. Even while these tasks are still important, many companies find that the more money they put in these areas, the less profit they make.

Resolution

By utilizing public feedback data to its fullest potential through a competitive intelligence service, you can outperform your rivals. Finding out the “why” behind your competitors’ reputation success by evaluating their ratings, reviews, customer sentiment, and reaction rates is one of the main advantages of utilizing Reputation’s competitive intelligence tools. Possessing this knowledge at your disposal will enable you to recognize new trends and strategically organize your marketing initiatives to draw attention to your advantages over rivals.

With the help of competitive intelligence, you can gather and evaluate information from every aspect of your industry’s competition, giving you reliable, useful information to guide your business decisions. According to research, 89% of companies think they will lose market share if they don’t implement a plan based on competitive intelligence. Use the information that your rivals have to your advantage right away to make sure your franchise grows and doesn’t contract at the hands of formidable rivals.

Recruitment and Retention of Franchise Staff

Numerous industries are being impacted by a lack of skilled workers, and staff retention and turnover are persistent issues for all businesses, including franchises. High employee turnover exacerbates other issues that companies face, such as rising operating expenses and a decline in customer satisfaction as seasoned employees depart to be replaced by less seasoned ones.

Resolution

With that in mind, it is essential that your franchise company develop a Voice of the Employee (VoE) program in order to manage the employee experience.
Employee voice surveys are a crucial component of any VoE program. These give company executives enlightening information about what motivates or demotivates employees. Then, company executives can put policies in place to enhance the work environment and help employees stay on board.

Not only do clients write online reviews of your company, but staff members and past workers also do so on job portals all over the internet. When it comes to your recruitment and retention efforts, you will be on the right track if you begin using an online review solution in addition to doing frequent employee voice surveys.

High Operating Costs

Consumer spending power and your company’s profit margins are being squeezed by growing energy expenses and a crisis in the cost of living. Interest rates make it harder to borrow money to invest in your business while your board of directors is pressing for spending reductions. The current financial crisis in the West could mean the downfall of many organizations if financial resources are not managed carefully.

Resolution

Auditing your current tech stack and determining whether the solutions you employ actually improve operational efficiency or if they are a time and money waster can be a valuable step towards cost reduction for your company.

Businesses frequently utilize Customer Relationship Management (CRM) software in conjunction with several feedback and Customer Experience (CX) management systems. These systems operate independently, increasing the company’s expenses and diminishing its operational effectiveness.

By combining your CRM and feedback management tools into a single, user-friendly platform, you can start reducing operating costs at your franchise and manage client communications and comments from anywhere on the web at any point during the customer journey.

Customer Expectations

Customers now demand more from companies in every industry, particularly when high gasoline prices and widespread inflation have eroded consumer buying power. For instance, our data reveals that although hospitality patrons are eating out less frequently, they are spending more money when they do. Because of these actions, businesses in the hotel industry today place a greater emphasis than ever on the guest experience. In a similar vein, “66% of customers expect companies to understand their needs and expectations,” according to research on customer expectations. You run the danger of losing both new and current clients to your rivals if your business is unable to comprehend the expectations and wants of your customers.

Resolution

In the modern era of digital, your business must be able to comprehend the requirements and expectations of its customers. This requires having the technology in place to help you identify trends in customer feedback data, including sentiment of customers’ experiences with your firm.

You specifically need technology that make it possible for Natural Language Processing (NLP) to analyze client sentiment. With the help of these tools, your CX and operations teams will be able to make sense of the massive amounts of customer feedback data, allowing them to better understand what matters to customers and improve the customer experience.

How to Overcome Franchising Challenges?

how-to-over-come-your-franchising-challenges

If the issues on the following lists are affecting your franchise business, you need to:

1. To increase your exposure and credibility to prospective clients, start asking for and answering online reviews from previous customers.

2. Utilize the public feedback data of your rivals to your advantage in order to build on your advantages and capitalize on their disadvantages.

3. Put in place a VoE program to make sure you take action to keep employees and lower attrition.

4. Reduce expenses by combining your feedback management and CRM solutions into a single, all-inclusive software package.

5. Examine consumer feedback from surveys, reviews, and social media posts to learn what aspects of your business are succeeding and what still needs work.

FAQ's

A franchisor is an entrepreneur who owns a licensed business model, and a franchisee is a person or corporation that uses the franchisor’s business model to own and operate a business. The relationship between the two is called franchising. 

Being a franchise owner is both gratifying and labor-intensive. Individuals with weak time management and customer service abilities could find it difficult to handle the duties involved in running a franchise. For the benefit of their staff and clientele, franchisees must be well-prepared and structured to serve as team leaders.

Some say that the best time to make business calls is between 4 PM and 6 PM in the late afternoon, or between 8 AM and 10 AM in the early morning. Others say that the best time to call customer service is in the morning, between 5 AM and 12 PM, when call center wait times are typically 70% shorter. Wednesdays and Thursdays are also considered good days to call.

Final Thoughts

It takes a lot of work to start a franchise, and having the correct plan in place is essential to the brand’s successful growth. Given the numerous difficulties associated with franchise control issues from the outset, using business management software is always advised to help you lay a solid foundation for your company as it grows. From local franchisees to international campaigns, NFA (National Franchise Association) is made to deal with a variety of challenges. Our software will swiftly become an essential component of your business operations. We invite you to schedule a demo with us to learn more about how it might benefit your company!

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