Just as we happily share our vast point of sale (POS) experience and expertise with startup owners in order to help them make the best decisions from the very beginning, we at Sintel Systems are happy to share articles and commentary about the retail franchise market.
Forbes.com sees five factors that make a difference to influence franchise success. We’ll call them the five points of a franchise star.
★ Right Model
Successful chains distinguish themselves from the competition. McDonald’s, for example, provides “quick, convenient and inexpensive” meals relative to traditional restaurants. KFC offers the same attributes, but focuses on chicken versus hamburgers. Dunkin Donuts’ offerings are an alternative to those same items available in convenience stores.
★ Right Scale
The larger production scale of a standardized menu can mean cost savings from lower costs per menu. McDonald’s’ 33,510 units make for a 30.12% operating margin, whereas Wendy’s 9,792 stores manage only a 7.38% margin.
★ Right Scope
Forbes.com points to the “cost savings associated with the offering for sale of different products by a single corporation rather than by different corporations.” This explains the higher return on assets by McDonald’s and Panera Bread, who offer a larger number of products for sale, over Wendy’s and Dunkin Brands.
★ Right Location
Older franchise stores had the opportunity to cherry-pick the best locations, which in turn may reinforce the other four points in the franchise star, and lead to larger operating margins and a higher return on assets.
★ Right Market Saturation
Franchises with less market penetration have more room to grow via new store openings over more established brands. Clearly, Potbelly benefitted from this advantage.
Consider Forbes.com’s bottom line as you plan for your own star turn. “Successful franchise chains begin with the right business model, and proceed with the amassing of the right scale and scope in the right locations, until they reach optimum market saturation.”
Before you make your franchise move, consider calling Sintel Systems for a free phone consultation to help weigh and understand your POS options. We serve as a franchise incubator for clients across the retail, restaurant and service industries, forming lasting partnerships with our clients that you simply can’t get from a reseller.
Read the full Forbes.com post here.
Sintel Systems is the only full-service provider of tailored Point of Sale systems across retail, restaurant and service industries, including frozen yogurt shops, pizzerias, sushi restaurants, cafés and retail stores.
As a single source for business solutions, our experienced, knowledgeable team negotiates the complex POS landscape for you to enable you to find the right POS system for your business and budget. Hardware – Software – Support