So, you’ve been thinking long and hard about investing in a franchise. Where do you go from here? It’s time to explore the next level of franchise investment – through differing strategies. Here are a few different strategies to consider when investing in a franchise:
Be the new franchise on the block
The benefit of being the new franchise on the block is the immediate interest you get from the community. You can count on a rush of customers, even if it’s out of curiosity. Your first year is all about dazzling your new customers and grooming those loyal relationships for continued success.
Once the first year passes, it’s on you to keep up that initial momentum. Prepare for a little dip as your franchise becomes a standard piece of the community. If your franchise is excellent at serving your customers, maintaining a strong following shouldn’t be difficult at all as doing business with you becomes a part of the purchasing cycle in the community.
Take over an existing franchise
The benefit of investing in an existing franchise is that you already have an established customer base. Numbers and profit expectations are already available, so little mystery exists with this franchise adventure. It’s very comforting to have your degree of risk established.
The downside risk is if the franchise business has a declining reputation due to inferior product or customer service. This reputation isn’t necessarily a reason to walk away, but it does represent increased risk and some extra work needed to rebuild relationships with the community. This work can be used as leverage when negotiating price, as well.
Local reviews tell a full story about how the community feels about an existing franchise. Check website reviews, yelp, and other customer websites to assess the reputation of your franchise candidate.
Master franchisee – developer franchises
We’ve talked about developer models before as an easy semi-absentee franchise. In these models, you own a franchise. In addition to your franchise, you are also the representative of the franchisor in a defined territory, helping aspiring franchisees get started. In exchange, you get a percentage of the royalties in exchange for your work.
As an owner of your own franchise, adding more in your region helps to boost overall brand recognition. This recognition benefits all franchisees in the area, and the franchisor, as well, as growth continues.
Developer franchise models aren’t nearly as common as other franchise opportunities, but I do have a couple to share with you if this is something you’re interested in. Contact me, and I’d love to tell you all about them.
Follow your franchisor’s plan
It doesn’t matter which approach to franchise investment you take, one of the best benefits of investing in franchises is that your franchisor provides you with all of the details about how to be successful. These details include processes, tools, and where to buy ingredients and materials, thanks to collective volume bargaining. By following their path to success, your risk is minimal with their proven methods. Brand consistency also attracts customers, knowing exactly what to expect.
How can we help?
Hundred Acre Consulting is a full-service, certified franchise consulting and referral firm serving the US and Canada, with a portfolio of over 500 Franchises available in 21 Industries. Our mission is to build community and economic growth by helping families and individuals realize their dreams through business ownership.