Navigating Franchise Options: It’s Not About Favorites; It’s About Finding the Right Fit
Choosing a franchise is not as simple as it seems. There are a head-spinning number of franchises that cover just about every sector, interest and investment level. FRANdata reports that there are more than 230 industries represented in franchising, with over 4,000 concepts and an estimated 200 new brands entering the market each year. Despite the vast options in franchising, seemingly every day, I am asked, “What is your favorite franchise?” Since a new year is upon us, there is no better time to explain why the answer to that question is complicated.
Eeny Meeny Miney Moe
As a franchise consultant and a member of the International Franchise Professionals Group, I am honored to represent more than 500 franchise concepts. These brands span across a multitude of industries. Whittling these down takes a lot of time and perseverance and education. Hearing from other consultants via Mastermind groups allows me to tap into experiences, good, bad, and ugly, and is another way to either cross brands off my list or highlight them and put them at the top of my radar.
Using a Business Assessment
I strongly encourage my candidates to take a Zorakle business assessment. This 15-minute test summarizes your hierarchy of values, best culture fit, stages of growth, overall business acumen and work style. The results are invaluable and help to narrow down the playing field further. The results can even indicate that owning a franchise is not a good fit for a particular candidate and may suggest staying in the corporate arena, pursuing a contractor gig, or exploring building a business from scratch themselves.
It’s Not You, It’s Me
Often, a franchisor will ask why I have not shown their brand. I may love the concept, but I won’t show it if it’s not a good match for the candidates I work with. Some franchisors will suggest that I throw their brand in the mix as a wildcard. But that doesn’t make sense, and here’s an example to illustrate why: If I know that my candidate really wants a passive concept, and we add a wildcard concept that is a pull-up-the-sleeves owner/operator model, then all I would do is confuse the process which is the last thing that they need. I hold valued concepts off to the side and wait patiently for the right type of person to come along.
Essentials in Choosing a Franchise
In choosing a franchise, it is critical for a franchise system to have a solid foundation. The management team should have strong experience in the business that is being operated. Training should go above and beyond to help ensure franchisee success prior to opening and ongoing as well. Expenses as it relates to the business should be reasonable. My favorite franchisors lower their royalty once gross revenue targets are achieved. Franchise Disclosure Documents (FDD) should be as transparent as the law allows and have minimal litigation and location closures. Other areas that draw me toward specific brands:
- Territory availability
- Strong unit economics
- Meaningful differentiators to the competition
- Proprietary components
- Preferred vendor relationships
The list goes on and on but shows that there is so much more to choosing a franchise than favorite brands or profit margins.
Choosing a Franchise in 2024
If you have not figured it out by this point, I do not have a favorite franchise to share with you. There are many variables that make a franchise great, but it has to mesh with the candidate. Feeling let down? That is not the intent. However, it is important to note that choosing a franchise is a complicated process, and one size does not fit all. As a franchise consultant, I take a close look at cost, labor size, time devoted, and passion. It is also why you should avoid navigating this journey alone. Investing in a franchise is a big decision and one that should not be made lightly.
The great news is that many financial experts believe there won’t be a recession in 2024, and interest rates are expected to fall in the first quarter. If being a franchise business owner is on your resolution list, be sure to have a knowledgeable franchise consultant help you understand this process and reveal your perfect match!
“Favoritism is proof that the very best isn’t appreciated.” — Joe Cervantes
