There are many small businesses with great ideas or products but still don’t gain desired success because the owners fail to scale the business through the right method. If you are facing a problem to scale franchise business and wish to grow your business and earn in crores, this is the right place for you.
In this article, we have covered a very special model in which you neither have to manufacture the product, nor have to sell the product. What you have to do is to count money. This model is best for franchise business owners who wish to scale their franchise from one or two to hundreds of them.
Many companies don’t do manufacturing and selling by themselves, what they do is they create a hub in the center and make a spoke around it. This model has been proven beneficial for many businesses and this article covers every aspect of it along with strategies and examples.
How to scale franchise business ?
These tips are the most trending for promotion for franchise business & actually helps to scale your franchise business :
YouTube influencers/ Video marketing
The second-largest search engine in the world is YouTube, with around 1.9 billion monthly users. That is the same as watching more than a billion hours of video each day. Consider reaching out to that big client base!
The difference today is that your franchise business’ marketing should be more focused locally. That entails a more focused target market and regionally relevant content. By distributing location-specific material, your franchise will have the best chance of using video marketing to draw in worthwhile leads.
These could be advertisements that feature local landmarks, your business or office, as well as any current projects or neighbourhood clients.
You can also create video content that demonstrates how your company participates in regional activities and events.
This will grab the interest of your local audience and encourage them to come into your store or contact you on social media. Consumers favour companies with a strong sense of community.
One of the finest places to use videos to advertise your business is social media. Regularly updating your Instagram Story with videos will help you build a robust online presence.
Your Stories will remain at the top of your followers’ story feeds if they like what they see. All of your promos will be visible to your followers. They’ll eventually become curious and visit your website to look at your offerings.
The majority of marketers have long since learned that picture-rich emails fail to pass through email filters and, even if they do, the output in html code is less attractive than plain text. Your email campaigns’ click rates might improve by up to 300 percent when you include a video in them. As a result, marketers can now use video content as a good tool for lead nurturing.
Hub & Scope model for Franchise Business
The hub and spoke business model was invented by the transportation sector, but businesses across all sectors have now incorporated the lessons that those who have used it have discovered. This company strategy relies on a central hub at its centre. Several paths, or spokes of a wheel, emerge from this hub and lead to the destination.
In this franchise arrangement, you hand over primary management to a master franchise and allow each master franchisee to launch a few franchises. Franchisees are spokes, while the master franchisee is the hub. You are the lone master franchisee.
Actually, the hub-and-spoke company concept is rather popular. For years, numerous businesses have been utilising it. However, it is already becoming more and more common as organisations adapt their tactics to a new reality as hybrid work and the “work from anywhere” approach grow in popularity.
Kekiz aids in understanding the hub and spoke paradigm. The largest cake supply chain in the world is called Kekiz. In Pune, India, Swati Waidande founded Kekiz in 2018. In a year, Kekiz expanded his franchise from 1 to 100. Swati used to make 5 lakh per month, but after implementing the hub-and-spoke concept, she now makes 5 crore and will soon reach 50 crore per month.
The hub and spoke paradigm is used, for example, in the Dr. Lal Path Lab. Under each centralised lab, they create collecting centres, which gather samples and send them to the lab for analysis.
Coca-Cola is another illustration of this; Coca-Cola instructs the bottling facility to use a certain amount of syrup as an ingredient. The beverage is produced at the bottling facility, and distributors and merchants sell it.
Amul follows the same method. Amul constructs the central cold and dry warehouses, and milk is transported from the warehouse to the store for sale.
Hub and spoke model advantages
- Your formula and technology are within your control, preventing copying by your rival.
- The cost is significantly reduced because not every franchisee needs the equipment.
- Because you exclusively lead master franchisees, your attention does not diverge. So, you may focus completely on making company decisions and plans for the company.
Hub and spoke franchisee model strategies (Kekiz)
- Padman Strategy
Indian film Padman is based on a true story. Arunachalam Muruganantham, a social entrepreneur, is the subject of this film. He created a low-cost equipment to produce an inexpensive sanitary pad for ladies. He substituted a $65,000 machine for the $3 crore one.
Swati Waidande took inspiration from this movie and replaced a $2 crore cake-making machine with a $20 lakhs machine.
- Fast and ready-made
Swati creates such pre-mixes and standard operating procedures that make the cake-making process quicker, simpler, and more effective.
- Assembly line Strategy
All cake-making steps are standardised using an assembly-line method, which makes the procedure hygienic, hands-free, and automated. For this reason, they maintain the master franchisee’s staff’s training and appearance.
- Kekiz cake institute
Swati Waidande creates the Kekiz cake training facility for skilled labour. She opens franchises quickly, so the need for labour is usually great.
- Economies of scale
When you expand your firm, economies of scale mean that your costs will go down and your profit margin will rise.
Typically, cakes just need five ingredients: cream, sugar syrup, chocolate, and fruit filling. Kekiz purchases this raw material in large quantities and sells it to the master franchisee for a discount. For the master franchisee, the bother of looking for, sourcing, and logistics of raw materials is over. Due to his big margin, the master franchisee does not close the Kekiz.
- Making market size total addressable
Since 70% of Indians are vegetarian, Kekiz solely produces vegetarian cakes. The market is very large because vegetarians cannot consume meat or egg, even passively in cakes.
- Break-down maintenance
In case the cake-making machine ever malfunctions, she has Mantability Improvement ready. To ensure that the process doesn’t stop, the master franchisee in this case takes another machine in 4 hours. Your defective machine will then be repaired and delivered in 24 hours.
- Return on Investment
Their master franchise has a profit margin that can reach 270%. Because there isn’t a cake like it on the market. People now cut cake during any programme. Pizza can be replaced with hamburgers, and tea can be used in place of coffee, but not vice versa.
- Low-cost marketing ideas
Barbie-themed gifts are made for girls’ birthdays and Doremon-themed gifts are made for boys’ birthdays. A mascot and a cameraman are also brought out. All photos and movies are put on a CD by the cameraman. Since Kekiz’s logo appears on all of these goods and decorative items, its recall value has increased.
If you share a social media post with Kekiz and it receives positive feedback, they will give you a discount on your subsequent purchases.
- Technology automation
They make all processes automated and software-driven for speed and scale.