SPECIAL REPORT: Top Franchises
Photo courtesy of Christian Brothers Automotive.
Continued from page 9. business plan, marketing, systems, corporate management, and culture set up in a way that supports managing stores from afar (or at least not from the premises on a daily basis)? Even if you’re not interested in running more than one unit today, you may be in the future, so it’s worth considering a brand’s ability to support you as you grow. FOCUS ON PROFITABILITY
Unit-level profitability is something that is obviously important to franchisees but wasn’t always top of mind for franchisors—at least until the recession hit. Since then, franchisors have had to focus more on what their franchisees are making (and how they could reduce their costs) just to keep them in business. In 2014, unit-level performance is a high priority for most of our top franchisors. “We made a very concerted effort at the end of 2008—primarily for defensive measures— to use our support staff to approach our franchisees not only through annual planning
but also through monthly trends and quarterly budget reviews. That has helped profitability at the unit level dramatically,” said Rich Wilson, president and CEO of CertaPro Painters. Again, this is where an Item 19 may come in—to give you a sense of how other franchisees are performing—but you’ll also want to ask existing franchisees how quickly the business will break even (see more on this in “What’s in an Item 19?) as well as how the franchisor has helped them reduce costs, increase revenues, and improve profitability. For businesses that are seasonal, these questions are even more important—how does the franchise brand ensure that franchisees are making enough money even when they’re not making as much money? “We’ve always, always, always been focused on unit-level profitability,” said Weed Man’s Lemcke. “Because we grew up in lawn care, we are very much in tune with where you need to have your EBIDTA.”
74%
of franchisees have a positive outlook for the long-term growth opportunity of their franchise business.
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