3 Ways to Maximize Profits Across a Franchise or Enterprise
If you’d like to maximize profits for a franchise or enterprise, know that it’s quite different from a traditional business model. A single-unit business entity will typically abide by a specific strategy and implementation plan. However, multi-unit businesses tend to onboard unique strategic efforts.
Multi-unit businesses have to consider the differences among the various geographic areas they reach, as well as each customer segment. For instance, many food trends within the hospitality industry will differ from one region to another.
Economic specifications can drastically impact an area. Some of the most important factors that contribute to these differences include:
- Age range
- Annual income
- Cost of living
- Cost of housing
- Population size
As you might already imagine, it can be difficult to keep every unit identical within a franchise or enterprise. The way in which a franchisor can maximize profits at an eatery in New York might be completely different in the Midwest.
Luckily, hospitality software companies make it simpler than ever to put strategic initiatives on autopilot. If you’d like to learn more about some of the ways in which franchises and enterprises use innovation to maximize profits, continue reading below!
Maximizing Profits for a Franchise or Enterprise
To maximize profits across a franchise or enterprise, feature low-cost, high-value solutions that cater to all types of customers. Whether it be innovative restaurant technology or classic products, there are numerous growth opportunities available.
Here are just a handful of ways to maximize profits for a franchise or enterprise. They’re effective solutions that utilize high-level technology.
1. Launch a Loyalty Program
Customer retention strategies can be challenging for a franchise or enterprise. Franchisees can have a different experience from each other, so the ways such business models sustain a large customer base can be a challenge. However, a restaurant loyalty program is a strategic endeavor that can work across the board.
When franchises add a loyalty program to their strategy, it's beneficial to use an all-in-one POS system. It allows the staff to organize important information, regardless of the eatery's location.
Using a restaurant POS platform that syncs loyalty rewards across multiple locations will make for successful results. One of the best perks about franchises and enterprises is that they have standardized menu types. So, perks and menu items can be uniform across the company.
This means that if one business has a specific point system and rewards selection, other locations will likely follow suit. A customer rewards program is best when consumers know what to expect, too. Then, customers can have a prize in mind when they make purchases under a specific umbrella company.
If the point system and rewards differ from one franchise location to the next, it can cause confusion and frustration. As the franchisor or restaurant manager, ensure that you accurately market the business' loyalty program.
2. Analyze Geographic-Specific Data Metrics
It's imperative that franchises and enterprises use software to collect and analyze customer data. Using integrated and readable analytics dashboards to monitor the most important information is vital for any business. However, it's key in the restaurant industry to know how one franchise location may differ from another.
A cloud-based system will provide business owners with the ability to compare and contrast various data metrics. From financial KPIs to customer profile demographics, there are many questions that restaurant data analytics can answer.
Such information will also serve as the foundation for geographic-specific marketing strategies. Consumer data will indicate differences from one region to the next. Whether or not a business abides by these unique differences can play a role in its success.
For example, if there's a geographic area that boasts specific trends or caters to a niche market, it’ll likely stand out across data reports. This information will provide high-level executives like marketing strategists and F&B directors to make smart business decisions. Such decisions can span various endeavors, from opening new locations to updating the generic franchisee manual.
3. Implement Premium Pricing On Mobile Apps
Online ordering apps can become the most significant revenue drivers for a restaurant. However, it’s expensive for eateries to become available on delivery platforms. Apps like Uber Eats and Grubhub charge fees, so it’s key that you’re aware of how to compensate for these common restaurant expenses.
When eateries raise prices on mobile apps, they’re able to combat various fees while remaining profitable. One of the most obvious reasons as to why a restaurant would utilize delivery apps is to maximize profits. It’s a common strategy that can boost revenue for the short and long-term.
Plus, premium pricing is proven to be an effective strategy for any brand, regardless of the business model or industry. Premium pricing is a technique where brands raise their prices just slightly higher than what their competitors are charging for competing products.
As a psychologically-backed marketing strategy, consumer data shows that people are more likely to purchase something that costs a little extra. It all stems from the idea that if something costs more money, the quality must be better, too.
If you’re the business owner or franchisor, it’s imperative to remember that premium pricing and marketplace order insertion pair perfectly with one another. Think about it this way–if you’ll be implementing marketplace order insertion for one of your restaurants, then premium pricing will likely be the only technique to combat hefty expenses.
Frequently Asked Questions About Maximizing Profits for a Franchise or Enterprise
The ability to maximize profits across a franchise or enterprise can be quite the challenge. One of the best aspects of operating a franchise is that it can exist across a wide geographic area. However, this idea also means that there are reasons for marketing efforts to change.
If you’d like to learn more about the basics of maximizing profits for a franchise or enterprise, check out the following array of frequently asked questions!
What Is a Good Profit Margin for a Franchise?
According to a recent report, the return on investment (ROI) of a successful franchise should be anywhere from 25 percent to 50 percent. Remember, the ROI meaning refers to the amount of money a business invests in it vs. how much revenue it generates.
How Can Franchise Profitability Be Improved?
Franchise profitability can be improved by implementing effective management and marketing strategies. Every franchisee will be given a “handbook” by the franchisor. This manual serves as a guide on how to operate the business. However, there will likely be rules and restrictions on what is acceptable.
With this in mind, consult with the franchisor on how much creative leniency you have as the franchisee. There is much room for possibilities, many of which can maximize profits for a franchise.
What Are Five Keys to Success In Owning a Franchise?
Five keys to success in owning a franchise include:
- Enthusiasm about the brand
- Knowledge of the industry
- Provide stellar customer service
- Offer high-quality products and services
- Following the franchiser’s manual and guidelines
What Is the Average Profit from a Franchise?
The average profit from a franchise will be dependent on the average sales. If you’re trying to make financial projections for a new franchise, consider looking at the metrics of local competitors. The unique thing about franchises is that even though the product line is similar, different markets might respond differently. Once you get a ballpark figure of what your average sales and profits should be, you can set more attainable KPIs.
What Is a Fair Franchise Percentage?
The average starting percentage for a franchise is 5 to 6 percent of volume, but related fees can range anywhere from 1 to 50 percent. However, all of these figures depend on the franchise and the industry.
Join the Revolution to Maximize Profits Across a Franchise or Enterprise
Revolution Ordering offers a complete suite of advanced solutions to help maximize profits across a franchise or enterprise. From marketing assistance to innovative off-premise solutions, our lineup of products and services can help your restaurant business grow faster than ever before. Book a demo today to learn how your business can be part of the revolution!