As you’re searching for the perfect franchise business operation, you might find yourself thinking, “Gyms are so popular — I should invest in a gym!” or “Look at all the coffee shops — I should open a coffee shop.”
Herd thinking is one of the most natural thought patterns for human beings. It probably helped keep our distant ancestors safe. A caveman who thought he’d head for a completely different part of the forest from all the other caveman might never have been heard from again.
Choosing a popular business isn’t a bad idea, either. Going with an ice cream shop in a town full of ice cream shops might be safer than deciding to open a chia seed pudding shop in the same town. But there is a saturation point for businesses; a town that can support eighteen pizza parlors might not be able to support nineteen.
The solution is differentiation. If you explore a dozen different franchise hair salons and by the end of your research you can’t say that any of them is a better choice than another, you probably can’t successfully open any of them in a town that already has a few hair salons. If you can see big differences among them, your chances of success are much better.
How can you tell whether a franchise idea is different enough from local competitors to stand out from the competition?
- Does it appeal to a different market? A pizza place that’s open late, has free wifi, and encourages gamers and telecommuters to camp out will reach a very different market from a pizza place with a playground, booster seats, and family-friendly music. Check out the local competition and get a clear idea of the markets they reach, then look for a franchise opportunity that appeals to an underserved sector.
- Does it offer something extra? There may be several home help franchises in town, but they may all offer much the same thing. If the competitors are all offering basic personal care and household help, you could be quite different if you choose a franchise that also runs errands, provides hair care, or organizes group events.
- Is the branding unique? Kids’ clothing resellers pretty much all accept clothing in good condition and sell clothing to moms. There’s not much difference in the goods or services, but the feeling can be different. A franchise with a more upscale image or one that offers a friendly, social atmosphere can stand out.
- Is it really better? Plenty of businesses think their point of differentiation is simply that they’re better. Unfortunately, quality can be very subjective… and their competitors might feel the same way. If you find a franchise that has a clear, measurable advantage, though, it’s a different story. A weight loss program with a 50% higher rate of weight loss than the competitor is different.
Instead of a “me too” approach, seek out a franchise business opportunity that will stand out in your location. your chances of success will be higher.