As a franchise consultant, I discuss with all NFA’s clients the importance of studying your competition when franchising your business. This advice is important for two reasons:
- In our experience, even if the market for your goods and/or services may seem crowded, there is often room for a savvy new entry into the field.
- When franchising your business, do not be afraid if there are a number of well-established competitors – you can often position your franchise program to provide many competitive advantages to prospective Franchisees.
The steps in the process of studying your competition when franchising your business are often the following:
- When franchising your business, study any existing Franchisors in your field to determine what they are offering their customers. How do your products or services measure up? How can you position your franchises to attract customers?
- When franchising your business, you must also determine what are the benefits and negatives of the programs your competitors are offering their Franchisees. What advantages can you build into your franchise program to make it more attractive to your prospective Franchisees? Areas to consider are:
- A larger territory
- More training in terms of duration, content and/or the number of people trained
- A slightly lower royalty or service fee
- Deferring royalty payments for a short period of time at the outset of the franchise’s operations
- Providing additional services to Franchisees
- Offering more personalized contact to Franchisees
- When franchising your business, look at the turnover rate for franchises as listed in the particular company’s Franchise Disclosure Document. Are a number of the existing locations being sold or closed? If so, can you determine the reasons why? High turnover can be an indication of Franchisee dissatisfaction.
Remember, when franchising your business, many prospective Franchisees find being part of a ground floor opportunity is more exciting than being Franchisee number 556 or 1673. They feel they matter more. By studying competing Franchisors when franchising your business, you can offer a better opportunity.
Thinking About Franchising?
NFA Franchise Consultants have the experience to help businesses franchise. Just watch and listen to some of our client case studies and video testimonials. We can HELP YOU and it doesn’t cost anything to call and talk to us!
So, if you are still asking the “should I franchise my business” question over and over with no clear direction, give us a call at (706) 356-5637, or contact us through our online form. We look forward to helping you take your business to the next level and beyond.