Franchisee Sam Nasser has been in the food and beverage industry for 25 years, the last decade spent in franchising. Over this time he has built up a Sydney-based mini empire of eight Gloria Jean’s Coffees outlets and two Oporto franchises.

ñProfitability in franchising is about sustainability; longevity is about profitability. The key numbers to watch are gross profit and labour costs, but the only real guarantee of sustainable business is the bottom line,î he says. ñUltimately you have to have a wise head and focus on the bottom line. The best systems are focused on profitability.î

The level of profit lets you know if you are doing a good job and measuring it shows how your performance stacks up in the system against other franchisees. A franchise groupÍs strength lies in the profitability of its members, Nasser says, and without profit there is no growth.

ñFranchisors are focused on growth and a key area is managing growth but it trips them up,î he suggests. ñProfit is the first area to suffer when there is fast growth. The key differential between truly great systems and those who will achieve some volume is their focus on profit.î

In his view both Gloria Jean’s Coffees and Oporto have a real commitment to franchisees, and are totally focused on their success. Working now on strategy for 2010 and where the business will grow (more franchises are part of the plan) Nasser has some advice for incoming franchisees.

You’ve got to have a look at the quality of benchmarking in the system. Can you compare yourself to other franchise groups and other franchisees in the system?î Nasser queries. ñAs an investing franchisee I won’t go near a system if the franchisor is not focused on profit.