Please note the following points when joining a franchise headquarters that develops a dominant strategy.
- How to decide where to open a store
- Support system before and after opening
- Discretionary power over store operations
How To Decide Where To Open A Store
When opening a store as a franchise member store that develops based on a dominant strategy, there are two main patterns for deciding on the location of the store.
- opened in a location determined by headquarters
- Open in the area of your choosing
The store’s location greatly impacts attracting customers, so it must be carefully considered.
Opened In A Location Determined By The Headquarters
If the franchise headquarters has already decided on the store’s location, and if you want to join the franchise on the condition that the store will be opened in that location, confirm on what grounds and how much profit you expect to make in selecting the location. Please give me.
- How much can population growth be expected in the future?
- Advancement status of competitors
- Store opening status of other stores in the same area
Open In A Location Of Your Choice
We will join the franchise headquarters, which is developing a dominant strategy. Still, we will have to carefully consider locations, such as deciding the location of opening by ourselves with the cooperation of the headquarters.
It is extremely difficult for individuals to collect trade area surveys independently.
With the cooperation of the Franchise Headquarters, please collect data from trade area surveys, competitors, the status of neighboring stores’ advances, and future store opening plans.
ALSO READ: Steps And Framework Of Brand Strategy Planning
Support System Before And After Opening
In addition to the opening stage, support for management and sales after opening is essential.
- Disseminate an overview of the strategy envisioned by the headquarters
- Advice and support for solving the problems faced by each store
One of the benefits of participating in a dominant strategy as a franchisee is increased name recognition.
To achieve this, franchised stores need to raise each other up to monopolize the trade area in a specific region and grow the chain as a whole.
When selecting a company to conclude a franchise agreement with, please identify a franchise headquarters that has a well-established system in which the person in charge at the headquarters communicates closely with the franchised stores and provides the necessary support.
Discretionary Power Over Store Operations
Find out how much discretion the owner has when it comes to franchising.
In particular, in the case of franchise headquarters, which are developing a dominant strategy, there are cases where manuals are created to ensure thorough compliance by area or for the entire chain store.
It is an essential measure for the whole chain store’s branding and concept probability.
However, when viewed at the individual store level, each store has its special circumstances, and it may not be possible to respond according to the headquarters’ decision.
For example, let’s say that a restaurant open late at night has a rule that at least two employees must be on the late-night shift, in the case of a store that is constantly suffering from a shortage of staff, having employees stationed at night can lead to situations such as not being able to organize shifts.
In such a case, if it is possible for the owner to shift to a part-time worker with the same experience as the employee, it will be possible to prevent the overwork of the employee.
Also, if the owner has the discretionary power to request personnel from nearby stores, it will be easier to create shifts.
The degree of discretion varies by franchise headquarters.
Demerits Of Dominant Strategy
- become a scramble for customers among chain stores
- The data obtained from the dominant strategy is difficult to utilize in other areas
- susceptible to local changes
Become A Scramble For Customers Among Chain Stores
The presence of other stores of the same chain in the same area can result in competition for customers. Be especially careful during the off-season or when there are few customers.
When opening stores with a dominant strategy, it is essential to differentiate from nearby stores. There is a way to create an original menu only offered at each store.
It is also effective to carry out unique campaigns at each store.
At this time, please keep in mind that chain stores that are opening stores with a dominant strategy should work hard and improve each other.
It is also possible to increase the number of fans of the entire chain store by improving each store’s customer service skills and product quality. It also helps prevent the outflow of customers to other brands and chains.
Rivals are just other chain stores and brands, and chain stores are business partners who should fight together and cooperate. Enhancing each other among chain stores is essential for increasing the brand power of the chain as a whole.
Low Versatility Of Market Data
The market data obtained by the dominant strategy has the weakness of low versatility.
Highly accurate data specific to a specific region may not apply to other areas.
Please note that you must conduct a market survey from scratch when opening a store in another region.
Susceptible To Local Changes
Suppose market conditions change due to sudden changes in urban planning, population changes, or sudden disasters. In that case, it may be necessary to make major revisions to management strategies and invest in costs.
For example, suppose that a family restaurant was developed in anticipation of constructing a large-scale condominium, but the construction itself was canceled.
In this case, it is not a zero possibility that the target will be changed, and the menu and interior will need to be reviewed at all stores.
To avoid such a situation, conducting a thorough market survey before opening a store is essential.