Choosing the Right Franchise

Big Opportunities with Small Franchises

smaller franchisesLarge franchises with a huge base network of franchisees can inspire confidence in people looking for a franchise business opportunity. But small franchise systems also have their advantages. While you won’t find a list of the smallest franchises, it’s easy to spot them. Smaller franchises are usually newer with few locations, sometimes under 50 nationwide.

You might even consider becoming the first franchisee of a local business you like. This can be a great opportunity to extend a winning formula, but it’s not foolproof.

For instance, Flying Burrito is a small restaurant chain in northwest Arkansas. They’ve been very successful as a local chain. They tried opening a franchise location in Tulsa, Oklahoma, a couple of hours’ drive to the east of their successful locations, but it quickly failed. Because of their established presence in northwest Arkansas, they were able to open other locations to better serve a population that already knows and loves the restaurant. In a new area, their franchisee had a hard time replicating the same success. While this is just one example, a franchisor with more existing locations spread across the nation is better equipped to help you start in a new market, since they’ve done it more than once.

Being on the ground floor of a new franchise has its advantages. Smaller franchises with less powerful brands than the big names may charge much less in fees and royalties. A smaller system may offer more adaptability to your needs, and dealing directly with the higher-ups at your franchisor is commonplace when there are just a few franchises. Between lower costs and higher access, you can have a bigger impact on the direction of the franchise over time.

Smaller franchises also typically allow for more flexibility and experimentation because they’re still trying to get things right. Their systems are less firmly in place and the business may still be more nimble than a larger corporation. If you’ve got a great idea that might be successful across the system, a smaller franchise system allows you to take that idea to the franchisor more easily.

The disadvantages of a smaller franchise system are clear — lower brand awareness and limited resources for support, training, and technology. While you may be prepared to build brand awareness through your own efforts, it’s difficult to get around the limited resources in terms of training and technology. Without the support systems in place, you lose a lot of the benefit of going with a franchise rather than starting up on your own.

As always, it’s important to ask other franchisees as much as you can about the franchisor and system behind operations. With smaller franchises, there are fewer people to ask — but franchisees may have stronger relationships with the franchisor, Conversations with these franchisees might give you far more insight than talks with a franchisee of a larger franchise system.

Size is just one aspect of the franchise opportunity, but it’s something to think about as you’re comparing your options.

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