Offering everything from sandwiches to tire repair to consumers, franchises play a huge role in how business gets done in the 21st century. And it’s easy to see why: they work. According to the Small Business Administration, only 5% of new franchise businesses fail, as opposed to 30% of non-franchise businesses.

Franchising, however, is not a sure thing; there are reasons why some succeed and some do not.

The Idea

The most important element behind franchise success is the idea.

The idea has to be unique, creative, and something that the market needs and wants, both now and in the future. It need not be an entirely new idea, but it needs to have enough new elements to make it fresh, interesting, and marketable – a twist, a different angle, something that hasn’t been done exactly that way before. A good idea also avoids one common trap in the franchise world: over-saturation of a market. By definition, a good idea puts a franchise business ahead of its competition.

The System

A franchise needs to have a workable and easily-replicated system. The reason McDonald’s has been successful is that the menu is simple, the production process makes sense, and each individual restaurant can be run by a manager with minimal training. A franchise’s system includes effective leadership in the parent company, since good leadership affects how the whole business runs.

Advertising and Marketing

One of the benefits of franchising for individual franchise owners is the advertising provided on a national or international level. Because of this advertising and marketing, consumers recognize the brand, understand what it offers, and know what they can expect. The individual franchises can then piggy-back on this brand recognition and build on it with advertising in their own local or regional markets. Brands that don’t offer good marketing on a national level, however, make it difficult for individual franchises to succeed.

Ongoing Communication, Training and Support

There must be a sense, in a franchise system, that everyone’s in it together. This means regular communication between the parent company and the individual franchise owners; training in new systems, methods, materials, and products; and support for franchise owners, operators, and managers.

For a franchise to succeed it needs a good idea, a strong and easily-replicated system, creative marketing, and communication and support. With these four elements, a franchise might not have guaranteed success, but it has a good shot at surviving, thriving, and growing into the future.