A SWOT Analysis is a strategic planning framework all franchisors should engage in as part of their franchise system planning processes. This best practice is related to a franchisors need to complete a comprehensive franchisor business plan and maintain a strong governance focus on the future
Strategic planning frameworks, like SWOT Analysis, are increasingly essential to franchisors given the need to navigate an established franchisor business (and aligned franchise network) through an increasingly dynamic operating environment with multiple disruptive forces areas (e.g., technology, social, legal etc).
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. The assessment of Strengths and Weaknesses are referring to aspects internal to the business. Meanwhile, Opportunities and Threats are external aspects that could impact the business.
A thorough SWOT should be more than a brainstorm of Strengths, Weaknesses, Opportunities and Threats. We suggest there are structured areas of inquiry within each area. Importantly also, there should be an aligned assessment of implications. Accordingly, we suggest the following:
- Strengths have corresponding actions to strengthen / capitalise
- Weaknesses are associated with actions to mitigate
- Opportunities have corresponding actions to exploit, and
- Threats have actions to ameliorate
Franchisors have many unique dimensions that should be taken into account, such as Intellectual Property and brands, business models, people, processes, technology and so on.
Of course, there will always be more actions than a franchisor company can practicably undertake. There is clearly, therefore, a need to rate and rank.
We suggest best practice franchisors will complete a comprehensive SWOT Analysis as part of their franchisor business planning process. The SWOT analysis should be undertaken / updated at least annually and requires a specific focus on the unique aspects of the franchisor business.
- Do complete a franchisor SWOT Analysis at least annually?
- Could your SWOT Analysis be more comprehensive and structured, identifying a wider range of factors, and producing more action-oriented tasks?
About the Franchising Best Practice 500 Series
This is part of a series of franchising best practices. Franchize Consultants is sharing and publishing these best practices weekly for the betterment of franchising. We know that better knowledge and execution of franchising best practices leads to bigger and more valuable franchisor and franchisee businesses.
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