Many popular franchises are in highly competitive areas like Pizza shops and some fast food joints.
Here are a five ways to compare local, popular franchise options:
1. Look at each franchise through the eyes of a small business owner. Looking at franchise opportunities through the eyes of a consumer, especially early on in the research process, doesn’t get it done. You need to look at the metrics. You need to see the operation from behind the desk…from behind the counter. You need to see how the marketing works. Ask the franchise development representatives how the franchisor helps you find new clients.
2. Find out what each franchise’s Unique Selling Proposition (The USP) is. Ask the franchise development directors how their opportunity differs from the others in their space. Also, ask the current franchisees what they think the USP is. And, ask them if it does in fact, separate them from the competition. All of us, (including your potential clients/customers) are constantly being bombarded with hundreds of marketing messages every day. Will they be convinced to try your service or product, or will your franchise’s marketing message be lost in the troposphere.
3. Visit some of the up and running franchise operations of the franchises you’re interested in. Existing franchisees love to show off their businesses. Learn how to arrange some in-person visits as part of your franchise research process.
4. Use Google. Now, not everything that’s available online is true. Sometimes, it’s not even close to being accurate. Still, doing a search for things like fraud, lawsuits, or legions of unhappy franchisees, can yield some pretty good information. Just make sure that you verify it. In case you’re interested in some recent franchise tidbits, the Rip-Off Report always yields some interesting finds.
5. Ask the right questions. However, if you’re looking at a highly competitive franchise category, you’ll need to kick things up a notch or two, question-wise, in order to get the answers you’ll need to make a yes or no decision on a specific franchise to buy.
- What is your failure rate?
- How many franchises did you sell so far, this year?
- How many new franchises did you sell last year, up until now?
- If I was a member of your own family, what would be the #1 reason you’d tell me to buy your franchise opportunity? Why?
- What does your company need to work on to make it even better?
Admittedly, those are tough questions to ask. It’s Ok; this is about you…your money, your time, and your future.
Don’t just up and buy a franchise because it is in a crowded sector unless you know you can dominate your local competitors. If you are not sure, don’t gamble with all of your investment money. Take the time to ask the though questions and compare your options before making one of the biggest investments of your life.