Why Now Is a Good Time to Invest in a Franchise
Published January 31, 2018
The franchise field is changing. Here’s why to invest and what to look for before you buy.
Not Just One
In the past, a franchise may have been equated to running a Mom-and-Pop store, but with a better brand and more backing. Today, franchisees are doubling down on their investment. Many franchisors offer multiple-location deals. In fact, some require that a franchisee agrees to open more than one location. Additionally, more franchisees are choosing to become multi-brand franchisees. Once a franchisee has the staff and the capital in place from running their first successful franchise, they may expand with more same brand franchises or they may choose to spread their investment by buying a different franchise. For example, one franchisee, Chirage Patel, left India and was employed as an engineer before he became a franchisee. Today his holdings include 10 Dunkin’ Donuts, 3 Moe’s Southwestern Grills and 4 different inn options including both Holiday Inn and Hampton Inn. Investing in different franchising sectors spreads risk and provide power in numbers. It’s one of the new ways franchisees are finding a larger and more stable income.
Discretionary spending is up, and some franchise categories are hotter than ever. The beauty sector is thought to be somewhat recession-proof as women want to look their best and while they may decrease spending, they still spend in tough economic times. With a rising economy, that spending is increasing exponentially. For example, Amazing Lash Studios, a relatively new franchise, hit number 14 on Entrepreneur’s 500 Top New Franchises and 49th on their list of fastest growing franchises. Another newer concept is the fast-casual restaurant. McDonalds’ is fast food and a place like Applebee’s is casual – fast casual falls somewhere in between. The category is marked by high quality, fresh ingredients – often giving customers an opportunity to select their own favorites, but with an eye towards affordable pricing and speedy service. Leading the way are the fast-casual pizza restaurants, like PizzaFire, where a customer’s personalized pizza is fired and ready in a matter of minutes. The health and fitness franchises are also enjoying continuing fast-paced growth. Individuals want different health and exercise choices. It opens the category up to everything from traditional gyms to new entries like HYPOXI that offers vacuum and compression technology for spot reduction along with low impact exercise. Expect the emphasis on health and fitness to grow not just its own category, but it also goes hand-in-hand with healthier food choices.
Of course, one of the areas of support you expect from your franchisor is help with marketing and advertising. But, the face of marketing is changing. Social media has become a growing force. It’s one that every franchisee has to be ready to use and control. The last thing a growing business needs is a complaint that goes viral. On the other hand, building your social media audience gives you the opportunity to drive business with specials, contests and even “come in now” offers that can bring you a customer at a specific time of day or for a specific product. Don’t ignore the importance of video in your social marketing – it’s preferred. You can grab the attention of prospective customers and bring them to your franchise. Two words of caution. First, when you choose a franchise, make sure that they will offer you the digital support that makes such a big difference in today’s market. Second, be sure you have someone who can help you manage your own local social media. Be ready to capitalize on what can be a very inexpensive and very effective means of reaching both established customers and new customers.
Sell the Experience
Millennials are already a force in the marketplace and their impact will continue to grow. They’re the first generation to outnumber the baby boomers. As you choose your franchise, keep in mind that these younger consumers want an experience. You want to choose a franchise that offers that whole turn-key package – the ambiance and the décor that provides a backdrop to enjoying coming to your location. Then, be sure you back it up, with a people-pleasing staff that will put the customer first. Always remember, you’re not just selling a product or service, you’re selling the whole package – the customer-pleasing experience – that creates loyalty. Buying a franchise gives you a head start. You’re working with a proven brand. You have the support of not just the franchisor but the network of franchisees who will share their success secrets. You win customers who rely on the franchise brand for consistent quality, economics of scale – and an enjoyable experience. It makes franchising an excellent investment – just find the franchise that fits your passion!