The Secret Sauce Behind Franchise Brands That Surpass the 100 Unit Mark – Lorne Fisher

Fish is a PR agency that serves brands throughout North America and some international markets. We focus predominately on the franchising industry, we help franchisors either attract new franchisees to their brands or increase awareness of their products and services to consumers. We’ve been around about 15-years and are based in South Florida. 

When we started our firm we had a few small clients but knew we wanted to target working with larger well-known brands. A couple of our initial clients were smaller franchises and they introduced me to the International Franchise Association (IFA), which is the largest association of franchisors and franchisees in the US. For any small business being known for something specific can help you grow faster. While at the time I didn’t know the franchise industry would become that niche for us, we attended their national convention and had a productive show. After securing a partnership with Dunkin’ Brands, that gave us credibility with other brands and we’ve grown considerably over the past 15 years. 

No matter if you are an independent or a franchisee you are the owner of that local business. The main difference is the business concept, processes, branding, and systems are provided to you by the franchisor. As defined by your franchise agreement you will pay a monthly percentage of gross sales to that franchisor as a royalty for all the resources they provide to you. Whereas independent business owners have to create or source all those resources themselves. 

The main way franchisors make money is the royalty fee. Based on the research we’ve seen from the IFA and other sources, once a franchise brand hits the 100 unit mark they become sustainable in their own right as a brand. Typically brands under 100 units are considered emerging brands, to give you a perspective I believe the stat is 70 percent of franchise brands are considered emerging. Which of course means very few get to that 100 unit mark. 

The secret sauce for brands that make it past the 100 unit mark is that the franchisor realizes they exist to support the franchisee. When you see a franchise company that is primarily focused on selling franchise units or marketing the business to consumers, they aren’t being successful. The franchisor's true customer is the franchisee and when they focus on providing great support to their franchisee and growing unit-level profitability those are the brands that see great success. 

There are about 800 thousand franchise business units in the United States today, that collectively provide about 8 million jobs in America. Overall franchise businesses represent about 3 percent of the GDP in America, around 40 percent of franchise businesses are in the restaurant vertical but the rest of them are all non-food brands. Services business and home services have been two of the biggest growth areas we’ve seen in franchising over the past few years. 

Resources