Why is it that some franchises seem to reach a plateau with a small number of franchises while others in the same industry break through – and keep growing and growing? We explore the psychology of growth and look for practical solutions to the dilemma.

 


What can you do when doing more doesn’t get you more? 


According to Wikipedia, the “plateau effect” is a force of nature that lessens the effectiveness of once-effective measures over time. A “plateau” is a period where there is no improvement or decrease in performance.


You see franchises in the plateau stage all the time – the restaurant chain that never seems to get any bigger or smaller, the lawnmowing franchise that only seems to operate in one city. The problem is that the plateau is only a temporary state, generally only lasting a year or two at best. After a while, natural attrition takes over. If you don’t grow, you die, and all that.


The big questions in the mind of all those facing this dilemma are: “How the hell did this happen?” and of course: “How the hell can we get back on track?”



In my experience, it’s not a case of what happened but who happened.


The usual suspects are lack of time and complacency.


When I started a new franchise some years back, filled with enthusiasm and with nothing much else to do, I quickly sold six franchises. Then, of course, I got busy training and supporting the new franchisees, too busy to focus on selling more franchises. One of the best decisions I have ever made was to hire a franchise recruiter to take over that part of the business.


Complacency is something you see in salespeople all the time. I was once the CEO of a company whose sales manager had smashed all his sales targets in his first year – really blown them out of the water – and had lived on the kudos of that achievement and the repeat business ever since, not taking on a single new contract. He was still working hard, but the fire had died.



How to you go from getting stuck to success?


That’s the subtitle of an excellent book on this subject The Plateau Effect by Bob Sullivan and Hugh Thompson. The book is about individuals who’ve plateaued, but it can also be applied to franchises or, in fact, any business.


The book authors identify 8 causes of getting stuck, and provide solutions – or as they call them, “solvents” – for breaking through. For example, one of the causes is immunity – that part of human nature that results in people, relationships and businesses becoming immune to the same approaches, the same techniques, the same solutions.


As Einstein said, “The definition of insanity is doing the same thing and expecting a different result.”


You can find a useful Powerpoint summary of The Plateau Effect on Slideshare.



Why franchisors can’t sell franchises


I am often approached by franchisors who have reached a plateau and aren’t sure how to progress – aren’t franchisors, unlike franchisees, supposed to know everything? I point them to this article Why Passionate Franchisors Cannot Sell on franchise-info.ca.


One of the most common requests I receive from both experienced and new franchisors is to help them sell franchises. Because franchise sales is a form of business brokerage, and New Zealand legislation requires business brokers to be licensed, I haven’t been in a position to help – until now. I recently teamed up with a former colleague of mine, Mark Gumbrell, a licensed business broker, to form The Franchise Store – New Zealand’s first specialist licensed franchise sales agency.


To find out more about getting back on the growth path, contact me or Mark on 09 575 8365

or 021 22 44 814.






Article by Robin La Pere, No Ordinary Business and Franchise Consultants

Contact me at robin@noordinary.co.nz.




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Robin La Pere of

No Ordinary Consultants has been a marketing manager, franchise manager, CEO, franchisor and, now, a franchise and marketing consultant. He has sold many franchises and has just teamed up with franchise sales guru Mark Gumbrell to form The Franchise Store, New Zealand's first specialist licensed franchise recruitment agency.

 

 

 

 

"Robin had a significant and positive
impact ... on Signature Homes as a whole, as evidenced by the fact that our business became one of the fastest growing businesses in New Zealand, winning a Deloittes Fast 50 Business Award in 2003, seeing total sales soar by more than 500%."

 

          Gavin Hunt, Signature Homes