A franchise, like any business, has a life cycle. Although, every franchise is different, most successful operations will progress through these stages, going from infancy, into growth, maturity and finally to renewal or decline where the franchise is either wound up or revamped into a new stage of growth.
Identifying which of the franchise life cycle stages your franchise is currently in can help you understand your businesses needs and ultimately work towards greater success.
4 Stages of the Franchise Life Cycle
Stage 1: Infancy
The first stage for any business is infancy, however, when taking on a franchise many of the stumbling blocks of starting a business are removed. Taking on a franchise often means taking on a tried and tested business model. This means that major problems have already been identified, worked through, and resolved.
This does not, however, mean that a franchisee will skip this stage entirely. During infancy, the franchisee will need to work hard to build their business. Many franchisors offer training and support throughout this process, aiming to give the franchisee the best possible start.
Stage 2: Growth
The growth stage usually hits a franchise around year 2, which is often considered quicker than a business start-up which can sometimes be as late as year 3 or 4.
Within this stage you will likely have built a customer base, be starting to cover your overheads, and begun making a profit from your franchise. For those franchisees with bigger ambitions, now may be time to look at expansion, this may be through taking on employees or adding an extra location to your operation.
Adapting is key in this stage to ensure that the franchise continues to run smoothly with a focus on strategy and goals to continue in an upwards trend.
Stage 3: Maturity
After periods of growth comes maturity. In this stage of the franchise life cycle, you are likely to have a business which makes a comfortable profit. It’s important during this stage not to become complacent. Taking your eye off the ball could cause you to lose touch with your customers and their ever-adapting needs.
Stage 4: Renewal or Decline
Most businesses will enter a stage of decline at some point during its life cycle. This can bring about two scenarios. For some, they may wish to sell or wind down their business. For others they may look at diversifying their offering in line with current consumer needs. When done correctly, diversification can lead to a new stage of growth as the franchise further develops.
Working with your Franchisor
Each stage of the franchise life cycle has its obstacles. However, taking on board the training and support offered by your franchisor means you should be able to avoid some of the worst mistakes. Aspray offers support to their franchise partners at every stage, whether they are just beginning or coming to the end of their franchise life.
If you are considering a franchise with Aspray, call 0800 077 6705 to speak with a member of our recruitment team.