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When you’re considering which franchise to invest in, make certain you research population trends, demographic forecasts, consumer consumption and spending models.
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By Laurie Brunner
The smartest investors always know to hedge their bets. They know taking a leap of faith should also be accompanied by shoring up secure assets — just in case.
That’s the idea behind most franchisees’ decision to invest their hard-earned dollars in the first place. As has been proved time and time again, franchising works because it combines the vision and drive of new franchisees with the assets, expertise and business model of the franchisor. It bears repeating the phrase successful franchisees have said for years: “Owning a franchise allows you to go into business for yourself, but not by yourself.” It turns out being in business for oneself is always the top response to the question, “Why own a franchise?”
There are pros and cons to consider in every financial decision, big or small. Here, we’ll start the discussion on what to look for in a franchise opportunity, what kind of products or services are most in demand, what industries are on the rise, and what business models fit your needs best. After all, there are, literally, thousands of franchise opportunities around the world: restaurants, health and wellness, automotive, legal services, media, home construction and repair. The list goes on and on, as there are franchises that now fill any need or want you can imagine.
Which is best for you?
How do you decide which is best? In a word: support. Without the safety net of a comprehensive support program, your potential to succeed is vastly diminished even before you get started.
Support begins long before you open the doors. For starters, you must figure out the best place to open that door. Does your potential franchisor help you with location selection? If the answer is “no,” it’s probably best to move on to another business partner. Benefiting from proven guidance and support is why you choose to own a franchise in the first place. The old real-estate adage “location, location, location” is true for a reason. Make certain your franchisor not only offers you extensive, up-to-date research to guide you in your site selection, but also works closely with you during lease negotiations. This will help hold your costs down right from the start.
Secondly, make sure you consider what kind of training programs the franchisor offers, not just to you but to every member of your staff. Most franchisees are entering an entirely new (to them) business or industry. Training, on-boarding, and continued mentoring is essential to successfully opening and managing your new franchise. It’s important to remember this training shouldn’t just stop when you open for business. There should be on-site staff training, on-line learning, class instruction, workshops, and hands-on skill building to ensure exceptional customer support, all delivered by qualified leaders, who have the business experience to coach and develop
your team.
your team.
There should be 24/7 on-line resources and easily available reference materials and tools for you and your staff to draw on as you ramp up your business. This includes having an assigned mentor from the franchisor that you, as the owner, can readily call upon when you have questions about running your business long after your grand opening. And you will have questions. Everyone does.
Sales, marketing support
Is there a track record of success that comes from sales and marketing support and operational expertise? You need to ensure the sales and marketing materials your franchise fee includes are results-based and work before you sign on the dotted line. Does that marketing support include a social media marketing editorial calendar (Facebook, Twitter, Instagram, Snapchat) to support your local advertising, downloadable and shareable digital resources, video assets, and supplemental media?
These days, consumers get their buying information less from traditional media and more from digital media. Has your franchisor kept up with these trends? Even better, has your franchisor been a leader of these trends? You cannot afford to invest your money with a franchisor that is playing catch-up with consumer behavior or best-practice marketing strategies
and tactics.
and tactics.
Another thing to think about is whether there are associated products or complementary services offered by the franchisor that provide you even greater opportunities to increase your revenues from customers? It’s long been known that getting the customer in the door is the hardest part of sales. Selling them complementary products takes a fraction of the effort, time or expense and drives incremental revenue. Find a franchise program that offers an efficient, proven way to boost your net income, while advancing the satisfaction of your valuable
customer base.
customer base.
Already a franchise owner?
Great. It may be time to think about adding a complementary franchise under your existing roof to keep your business fresh and add new customers. What can you add to current product or service line that fits in with emerging technologies or sciences, changing demographic trends? If you’ve saturated the market to meet one demand, add a concept that meets an emerging need. These days, there are plenty of ways to differentiate your services; you just have to open your eyes a bit wider and see how people are changing the ways they live. Don’t blink, they can change quickly.
Finally, as a potential franchisee, you must carefully consider what kind of product or service captures consumer sentiment now, in the present; you should also put on your fortune teller hat and predict what will excite consumers in the future. What can you invest in today that will most likely meet the growing waves of consumer interest and increased media coverage in the years to come? Sustainability of your market, at the minimum, and growth potential of the market cannot be left out of your equation.
For example, spending on health and wellness products and services has grown to more than $3.4 trillion annually in the U.S., according to the Global Wellness Institute. That’s more than three times the worldwide sales of pharmaceuticals. When you factor in the daily news stories about the tragic overuse of prescription drugs, interest in natural alternatives will continue to rise. Individuals are more conscious than ever about living healthier. Managing weight with obesity levels on the rise. Stress reduction, given the increased anxiety levels of most Americans, is gaining attention. Stopping smoking is a priority for 17 percent who want to kick the habit. Mindful approaches to supporting cancer care are increasingly being undertaken.
More than ever, consumers are likely to budget part of their incomes on wellness programs that range from the traditional to alternative medicines and holistic therapies, in a market that now offers validation and acceptance of complimentary treatments and remedies. When you’re considering which franchise to invest in, make certain you research population trends, demographic forecasts, consumer consumption and spending models. You don’t want to invest in a business that has peaked. You want to invest in a business that is on a provable and steady rise.
There are several important factors to consider when you’re choosing which franchise fits best. There are dozens of other pieces to the puzzle to fill in before you make your decision. The best news is, whichever franchise you choose, the saying “Making it on your own, doesn’t mean making it by yourself.” That is an absolute and what you can count on in a good franchisee-franchisor partnership.
Laurie Brunner is CEO of Positive Changes Hypnosis, a health and wellness franchise. She also serves as the President of MainStream Management, a consultancy that supports the growth of small to mid-sized businesses and emerging franchises.