Thursday, January 31, 2013

Franchise Efficiency in Processes Are Paramount in Procuring Profits

Why do franchise outlets survive better in a recession than other small businesses? Why is it that franchisees have such an advantage when small business failures are so high? How come franchisees of Franchisors with major brand names are able to get loans easier to expand in lean times and downturns in the business cycle, while other small businesses are denied loans and unable to get the funding they need to bridge the gap until the next business cycle?

Recently, at a Business Industry Expo in Palm Desert, California, Patrick J. Gauthier a partner with Kapalign Business Process Consulting stated that;

Any business that is efficient and constantly improving their efficiency through streamlining of their business processes has the advantage, and this is especially true during challenging times in the business cycle."

Indeed, Mr. Gauthier is exactly correct and he ought to know considering he is one of the leading authorities on business processes for both small and large businesses. This is where Franchisor's have the advantage and economy of scale to insure that their outlets are the most efficient possible. Any good franchisor knows that the more efficient the outlets are the more profitable they will become.

It's hardly a secret to large corporations with their Six Sigma processes, but most small businesses do not look at their business model in this way. Ah, but franchisors do and when they look at their business model they might be looking at several 1000 outlets determining which is the most efficient and why. They know what works best in each demographic, in what type of weather and all the regional variations too.

Franchisors are very much into the process of business because they know that it means survival. They take what works best and apply this knowledge and efficiency to each and every outlet, making the entire franchise system stronger and more profitable. And this is why franchisees have such an advantage over their small business competitors and why banks are willing to trust them during turbulent economic times. Please consider this.


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