Culture of Execution: The Winning Franchise Formula

Culture of Execution: The Winning Formula

When it comes to creating the winning franchise formula most small business owners think they know the ingredients. If they didn’t, they most certainly wouldn’t venture out on their own. However, according to the Bureau of Labor Statistics’ Business Employment Dynamics, about 80% of businesses will survive their first year in business. About 66% will survive their second year. Only about 50% will survive their fifth year. And, about 30% will make it to their tenth anniversary. As you can see, if everyone had the winning formula more than 30% of businesses would still be around 10 years later.

 The Franchise Concept

Because of numbers like these, more and more entrepreneurs are turning to franchising. Franchising offers a template for success. The things that business owners didn’t think about when they were formulating their plan, such as: floor plan layout and its impact on operations, documentation of all systems and processes for consistent training and operations, and the impact of a well thought marketing plan on business and brand development are a handful of the things that make a franchise relationship so valuable. A strong franchise brand will have already tested and refined all aspects of the business model, saving the entrepreneur the headaches of doing it themselves. Not to forget saving the entrepreneur from making many potentially costly mistakes.

 The Issue

Ideally, all the entrepreneur must do after engaging in a franchise relationship is effectively implement the standards.  However, that is many times easier said than done. Success in franchising only goes as far as the franchisee’s willingness to adhere to the established systems and standards. There is a reason why some franchise owners in similar markets with similar demographics succeed and others fail. If we did an autopsy of failed franchise businesses I am quite confident that we’d find that the cause of death was rooted in executing the formula.

 The Failed Business Autopsy Report

  • Time: Typically, at the start of the relationship every new franchisee is all in with the franchisor’s systems and procedures. They begin their new endeavor with enthusiasm and great optimism. They implement their training like they were taught. However, as time passes many begin to loosely apply their learning and become relaxed with implementation of the brand standards. Then, shortcuts creep in, knowing a better way rears its ugly head and before you know it, the proven methods begin to be replaced by “a better way”. Unfortunately for many, the better way isn’t better at all. What lured them to franchising in the first place is replaced by loosely structured systems and poor execution. Inevitably, this leads to lost sales, never reaching full potential and lost earnings.
  • Consistency and Accountability: For any business to be successful everyone must be held accountable for results, including the franchisee. Failing to consistently hold everyone accountable to the standards of operation is the first step toward failure. When a franchisee starts to relax on the marketing routine, operational standards and financial fundamentals, the system begins to take on a new standard. That standard usually involves less than great service, average product, below average cost containment, and a less than stellar brand image. The typical result is a decline in sales, which directly effects revenue.
  • Execution: Business is about getting things done and doing them the way they were meant to be done. Failing to get things done leads to stagnation and stagnation leads to status quo. Status quo leads to becoming average at best. No one in today’s world, which is full of many great alternatives, is going to pay for average. Once you become average you become a memory. When there are many options to choose from you must stay top of mind. Those that are top of mind are the highest performers. The highest performers execute.

Commit to the System

Most entrepreneurs invest in a franchise because the franchise has a record of success, a strong brand, a refined training program, ongoing operational support, marketing assistance, real estate site selection assistance, purchasing power, and established systems in place that help lower risk. Therefore, it would appear to be in the best interest of the franchisee to implement the tried and true systems of the franchisor.

If you are considering a franchise as your business template, do yourself a favor and implement their systems, procedures and brand standards consistently and correctly. The franchisor made it to where they are because they’ve successfully done it over and over again. Therefore, their way is the proven way. You’re paying for their knowledge, expertise, and experience. Do yourself a favor and run the business the way they say it should be run. Develop a culture of execution and insist on consistently doing things the way they are supposed to be done. Do this and the odds of your business becoming one of the 30% that make it to the 10 year mark goes up significanlty. Then, you’ll be positioned to renew that franchise agreement so you can do it all over again.


Randy Stepp is a business and franchise development professional who’s purpose is to help business owners realize their dreams of independence and freedom.

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