The Three Components of a Franchise Model

Look at Subway as the ultimate franchising model in the restaurant industry. Here are three key components of what makes them successful:

  • Efficient system
  • Small physical footprint
  • Low entry costs

Let’s expand on each point to see how other restaurant businesses can replicate this success.

Efficient system.

Everything from greeting the customer to adding toppings to the sandwich is standardized across all Subway locations. There is little variation in how a Cold Cut sandwich is made. The training process is the same. The sandwich-making tabletop layout is the same. There are no deviations at all.

Small physical footprint.

A Subway can be opened in a mall. A Subway can be opened on a street corner. A Subway can be opened in a corporate office tower. The small physical footprint allows for easy additions in any city, regardless of space restrictions.

Low entry costs.

You might have a maximum of three Subway staff working at a given time, all likely on minimum wage. The cost of the physical space is minimal for potential franchisees. Anyone who wants to run a restaurant business can do so with Subway. All they might need is a bank loan, and the banks already know the success of Subway overall (= low-risk investment).

If you can build a franchise business model with these three components in mind, you will be more likely to scale your idea and have others jump on board as franchisees. Make it too complex, then you have the opposite effect.

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