By: The Franchise King, Joel Libava
When you’re investigating franchise business opportunities in a highly competitive sector of franchising, it can be quite challenging to figure out which one you should buy.
For example, if you’re looking into buying a pizza franchise, there are hundreds of choices, if you count all the local franchises that have 5 or 6 franchises in their areas. That’s a lot of choices.
Recently, I received a call from someone who was interested inmy new free service. During our phone call, she told me of her interest in the senior care sector of franchising. She shared with me her reasons for looking at this area of franchising, and told me why she wanted to provide services to seniors. Her reasons definitely made sense.
A couple of her reasons are pretty popular ones.
I believe that most senior care service providers (franchise outlets) will be able to sustain their growth for the next decade, or more. So, getting into a dynamic area of franchising like this could make sense if you’re cut out for it.
One thing stood out during my call with this really sharp prospective franchise buyer, was the fact that she was getting pretty frustrated in her quest; that’s because there are so many companies out there that are offering senior care franchises.This many.
So, if you’re looking at franchises in what appears to be a crowded sector, how can you determine which ones you should focus on? Try these 5 tips;
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. This just may be the most valuable thing you can do, as you move towards your decision to Become a Franchise Owner!
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 ofunhappy 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. In The Essential Steps to Researching a Franchise Opportunity, I list 20+ great questions for you to ask franchise development reps and franchise salespeople. 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 buy a franchise in a competitive sector just because it’s in a competitive and maybe even “hot” sector. Buy it because it’s a great match for your skills. For example, did you know that if you were to become a franchisee of a senior care franchise, you’re immediate role would be one of sales? That’s right; you are the one that’s going to go out and find new clients. The franchisor may help with some client acquisition, but it’s mostly going to be you. Make sure that you buy the franchise you’re interested in because it makes sense at this stage in your life. And buy it because you can easily visualize yourself being the franchise owner in your area. A really successful one.