The 7 Characteristics of Your Perfect Franchise
William Penn said that “Patience and diligence remove mountains.” If you’re seriously considering franchising, you’re looking for the perfect franchisor to partner with. Sifting through the ocean of information about your options can be a daunting process that requires patience and due diligence. This patience is well worth it because there are 4,000 concepts out there and it is hard to find the right fit.
The following are the 7 key characteristics that can help you prioritize the right franchise:
When choosing a franchise, the first question is- “What do they do?.” The answer to that question is the concept. This can be anything from the following examples:
- Water Restoration
- Business Coaching
The possibilities are endless.
Once you know what the organization does, the next question is “Who does it serve?” Your answers above might change to the following:
- Residential Water Restoration
- Executive Business Coaching
- Commercial Painting
- Personalized Training
Beyond the market designation, a franchise might have a unique hook or angle that makes it unique. The following are examples of hooks for the concepts:
- The water restoration company might offer 2 hour response time at any time of the day or night.
- The business coach might specialize in helping companies in “transition.”
- The painting franchise might leverage patented technology in its process.
- The gym might specialize in training clients over 45 years old.
In each case, there’s a defining characteristic that helps make the business unique.
As a consumer, we’re already aware of concepts; but as a potential investor, we’re looking deeper at what makes a concept unique, how it’s implemented, and how it provides a satisfying experience to the customer.
What would make our franchise gym better than the other gym that’s half a mile away and that has been in business for decades? What does that gym offer its clients to maintain their loyalty when there are so many other fitness businesses around? As a potential investor, you should know what makes the franchise special.
As you explore franchise opportunities, you may choose to eliminate a whole number of candidates based on industry and concept. For example, some people are not interested in working in the food industry. This takes several hundred franchise possibilities out of the running. Some don’t want to be responsible for a retail outlet and the investment that entails. This would eliminate many more franchise concepts.
It’s good to set clear parameters regarding what kind of businesses you don’t want to consider, but be careful not to dismiss too many possibilities out of hand. In my experience, many franchisee candidates choose the option that was originally their last choice.
The key at this beginning stage is to be able to identify a concept that benefits all the parties involved. In an ideal situation, the franchisor has a winning idea that grows and makes a profit, the franchisee finds a way to leverage his or her business acumen to help further build the business and earn profits, and the customer receives good quality services or products.
If your concept is win win win, then it’s time to move on to the next characteristic- the franchise’s business model.
FRANCHISE BUSINESS MODEL
Before assessing any franchise investment you must ask yourself “How does the franchisor provide its product in a way that it can replicate success in each new unit?” Or, “What is the franchise business model?” When we refer to these systems we are talking about how the franchising organization achieves its goals through the day to day business activities. How do franchisees hire, train, purchase, market, deliver products and bill? Which technology is used in each step? As you gain more knowledge of individual franchise brands, you should be impressed at the efficiency and comprehensiveness of their systems.
Successful franchises have robust systems with simple processes. You should be able to see consistency from one unit to the next in terms of marketing, responsiveness, product offerings, and professionalism. Each Chick-Fil-A restaurant you visit is the same and delicious.
At first glance, you won’t know the details of a franchisor’s systems, but you should be able to understand its efficiency and capability while investigating the company.
Can you appreciate how the franchisor, franchisee, and customer are all succeeding? Do you feel like you could trust this organization if you were a potential customer or franchisee? The success of a franchise is rooted in the systems the franchisor has in place to ensure quality and consistency from each franchisee.
The franchisor’s most important role is as a trainer. Each franchisor has a different approach to training, and, in some cases, the more you invest the more help you will receive. Many franchises have great training programs that deliver classroom and onsite instruction.
Albert Einstein once said that “If I had only one hour to save the world, I would spend fifty-five minutes defining the problem, and only five minutes finding the solution.” Franchisors have spent vast resources understanding their business and they transfer on this knowledge to you as a franchisee. Proper training is critical to the success of your business.
Brand equity is one of the greatest benefits of buying into an established franchise. In established franchises, customers already recognize and trust the brand and they are willing to pay a premium price for services. When one works out at Orange Theory Fitness, it doesn’t matter where the outlet is located, they trust that it will be a great experience. As a franchisee in an established system, you don’t have to start from zero to prove that your brand sells quality products or services. As a potential investor, are you sold on the brand?
As a potential franchisee, the franchisor expects you to protect the brand. McDonald’s won’t allow you to sell gyros on the menu. Some potential investors are discouraged by how little freedom they have to tweak the franchise system.
FRANCHISE SYSTEM SIZE
There are benefits and disadvantages to both big and small franchise systems. The main benefit to being a part of a smaller franchise system is greater support from the corporate office. The main advantage to a larger system are greater brand recognition and more franchisees to bounce ideas off of. The top franchise systems are the right size for their business. There are great systems with as few as 50 franchisees and over a thousand franchisees.
Communication between the franchisor and franchisee and among franchisees is an important factor when researching different franchises. The better the internal communication in a system, the better the opportunity. Most franchise agreements are 10 years or more. Sometimes franchise relationships get complicated. It’s important that you feel at ease with the franchisor that you choose and that communication will be clear and effective. Look for systems that have a goal oriented culture. The opportunity should also contain knowledgeable, approachable corporate staff and happy franchisees.
FEEL GOOD FRANCHISES
If you would like to contribute to your community there may be a perfect franchise for you. Some systems emphasize “giving back” in many aspects of their operations by prioritizing their roles as good corporate citizens. Some examples include brands which follow “green” operating procedures, support local community projects; raise money for charities, and support personal development and growth in their employee’s career.
As you investigate opportunities, the brand that is most “socially responsible” sometimes stands out. Some companies are, by design, built to help people. If this is important to you, there are countless options that you might find appealing.
All 7 of these qualities are important in finding the perfect franchise for you. A well-qualified franchise consultant can help guide you through an assessment of these and many other factors that you haven’t even considered.
Ready to take the first step in hiring yourself? Let us help you find the best franchise match for you.