7 Warning Signs Your Franchise Location is Growing Too Fast - And How You Can Turn Too-High Growth Into Just-Right Growth

Franchise growing too fast

Rapid growth is great -- but too much rapid growth can kill. While all small business owners need to pace their growth, franchise owners have some additional concerns. Whether you're going it on your own without guidance from HQ, or whether you have questions about staying on track between check-ins with your marketing support team, this post is for you: Here are 7 warning signs that your franchise location is growing too fast.

Warning Sign 1: Your Cash Flow Is Out Of Control

Numbers, as they say, don't lie. When your cash flow does not match your business plan (if you're just starting out) or your expected projections (if your business is a few years old), it means your franchise location is in trouble. Again, it may look great to overshoot your bottom line because there's "too much" money coming in, but that money is coming in at the expense of something else -- possibly your time, possibly your equanimity -- and it may spell bigger trouble for your location down the line.

What to Do: Revisit your business model: What's different between what you expected and what's happening? Do you have a different customer base than you'd planned? Examine your sales receipts: Is there a pattern to when your revenue is spiking? Compare notes, if you can, with neighboring businesses and other franchisees: Are they experiencing anything similar? These are just a few questions to get you started. Once you pull one thread of the cash flow mystery, you'll start to get answers and solutions.

Warning Sign 2: Your Franchise Location's Company Culture Is Off-Brand

Maybe the franchise is known for its community engagement, but your location hasn't had time to plan your 4th annual fundraiser for the local library. Maybe the franchise is known for its genuinely cheerful employees, but yours seem stressed out and frustrated. Maybe the franchise is known for its "all questions are good questions" approach, but a lot of questions are going unanswered lately. Whatever the mismatch, it's probably pretty glaring. What to Do: Revisit the franchise's core values. Which ones is your location not fulfilling? More importantly, why? Odds are, the reason ties into this next warning sign.

Warning Sign 3: Your New Business to New Hire Ratio Is Off

"Your new business to new hire ratio is off" is a fancy way of saying that your employees are spread way too thinly. No wonder nobody planned that library fundraiser, no wonder your employees are unhappy, no wonder all those questions are going unanswered -- everyone is too busy scrambling with day-to-day operations to do anything beyond the bare minimum. Including you. Your location needs another couple sets of hands to keep the place running smoothly. What to Do: Well, simple enough, especially with the extra money coming in. Hire some new employees.

Warning Sign 4: Project Management Is Slipping Through Your Fingers

Speaking of being spread too thinly . . . you keep trying to deal with an upcoming product roll-out. You keep trying to source a new cleaning service. You keep trying to plan any number of projects, and yet you can't keep up with them. Those stressed out and frustrated employees? You can relate. What to Do: Slow down. Reread Warning Sign 1 above. Figure out the discrepancies between your business plan and your business reality. Hiring new employees can help you with this problem as well.

Warning Sign 5: Your Quality Control Is Out of Control

This is independent of whether or not you're getting those customer complaints -- and we'll touch on those in a moment. Even if nobody really notices that some burgers are getting served without pickles, it's not the kind of thing you can unsee. Same with a general sloppiness that's touching each aspect of your location's products or services. You know when you're not delivering the franchise's standards. What to Do: If it's a simple fix (talk to the grill chef about those pickles), great, do it. If the QC issue seems to be more global, do a more comprehensive audit. Review each step of your processes until you isolate the issues. Then figure out where to go from there.

Warning Sign 6: You're Spending All Your Time On Operations

You're in the weeds. You can't see the forest for the trees. You're the one running the cash register, cleaning the squeegee buckets, delivering the packages, grilling the burgers (forgetting the pickles?). You've lost focus on your franchise's mission and values, you aren't doing any long-term planning, and everything is falling by the wayside, including customer satisfaction. What to Do: Again, find some new hires to pick up the day-to-day spillover.

Warning Sign 7: You're Fielding More Customer Complaints Than Usual

Well, here you are. Customer Satisfaction Town, population: not your franchise location. Yes, there will always be unhappy customers, and yes, there will always be someone saying negative things about you on social media. But when you're hearing more and more about how your location delivered subpar product or poor customer service, this is a big red flag that something is wrong and you need to address it. What to Do: First, review the customer complaints. What are the trends? Do customers say your product quality is low? Or that you're always out of product? That your employees are delivering rushed, demoralized customer service? Those key areas of dissatisfaction will help you figure out where your business needs help.

Some Parting Thoughts on Safe, Fast Growth For Your Franchise Location

Small business growing pains are normal, but they don't have to kill your franchise location. Once you know why your franchise location's growth is out of control -- or if you need help figuring out why -- reach out to your support team at HQ. Ask them for business advice. If you have bought into a low-investment franchise brand and need to pay out-of-pocket for extra support, this is the time. Or if you have regular reviews with a franchisee account manager as part of your investment, see about scheduling an extra meeting now.


By Chaia Milstein, Biz2Credit

Chaia is the Editorial Manager at Biz2Credit, a company that matches small businesses with the funding they need to grow and thrive.

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