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by Dr Callum Floyd

The recession has brought challenging times for franchisees in many sectors. Many are finding it tough. Meanwhile, others are flourishing. Why is that?

Based on experience working with many franchisors and franchisees, on performance improvement projects, we present 10 key tips for franchisees in the recession.

  1. Commit to the business. Great franchisees have one mission: ‘To make a success of this business come hell or high water.’ Read Made in America by Sam Walton (the founder of Walmart) to truly understand the meaning of commitment and dedication to a business.
  2. Dedicated focus on the business. Some franchisees reach a stage in their development where they either take time out or reduce the quality of input into their business. This can have a telling impact on franchise business performance.
  3. Keep sufficient capital in the business. Other priorities can compete/emerge, such as a bigger house, a boat, a new car or other investments. These have a direct impact on business viability and required flexibility when the economy turns rough.
  4. Business planning, with clear goals and objectives. The adage ‘failing to plan is planning to fail’ may be clichéd but it is absolutely vital for all franchisees. Have realistic clear goals and objectives, and know what is required to achieve them. Then commit to working and achieving the plan.
  5. Understand the business model. Get to know the business model inside out. You need to master your business. Know what is and is not crucial to drive success. Understand the path to growth, including required investment and key constraints.
  6. Execute the fundamentals, again and again. Good franchises provide the blueprint and key tools for success. It is your job to execute fundamental success factors over and over again.
  7. Don’t try and change the system. Franchise systems by definition provide a system and set of rules. Understand the reasons for constraints and systems. Most will be there to a) protect the brand and b) help derive crucial value for all stakeholders - including yourself.
  8. Exceed customer expectations. Satisfied customers want more and recommend. Do the maths!
  9. Motivate and empower your staff. A pay check and a commission is not enough. Find ways to really engage your staff in the business.
  10. Control your expenses. Sam Walton notes this factor as an area where you can always find competitive advantage. Furthermore, he states that you can make a lot of different mistakes and still recover if you have an efficient operation. Or you can be brilliant and still go out of business if you’re too inefficient.

Why is Sam Walton relevant to this list? Sam Walton became a Ben Franklin franchisee in the US in 1940. And along with his brother, he became the largest Ben Franklin multi-unit franchisee with 19 units. He turned many stores around against all odds. Later he developed a new retail format and founded Walmart. Walmart is now recognised as the world’s largest retailer.

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Dr Callum Floyd is owner and editor of both Franchise-Chat ( and Franchise Wire ( He has a Masters and PhD researching franchising, and is Co-Owner of Franchize Consultants (, New Zealandís leading and award winning franchise development company.

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