Choosing the Right Franchise

Seasonal Stalking a Franchise

Halloween is past and the elections are over, so we’re just at the right time of the year to get some good information about how business is going… just by looking.

When you consider a franchise, you always want to know how much franchisees are earning, how solid the business is, and how satisfied franchise owners are. You can ask, but for many people these are private questions, and you can be sure that the franchisor will be doing all they can to make things look good.

A little stalking is not out of place.

You can’t tell on most days of the year how a business is doing just by looking. You probably don’t know enough about seasonal patterns to choose a truly typical day, you don’t know how weather affects traffic and sales for a given business, you don’t know the time of day when sales peak. and you can’t hang around watching very much without scaring the staff.

It’s different on Black Friday. Businesses that don’t get a great deal of extra business on the day after Thanksgiving — tax preparation services, for example — close. If you keep your doors open on Black Friday, it’s because you expect to earn enough money to make it worthwhile.

Black Friday is not actually the biggest shopping day of the year. The Saturday before Christmas usually has that honor, though it varies. Over the past decade, CyberMonday, the Monday following Thanksgiving, has been heavily promoted for online shopping. For the past five years, American Express has been working hard to promote Small Business Saturday following Black Friday, and consumer awareness jumped to 71% last year, so they’re doing a good job. In the past year or two, Thanksgiving Day has been promoted as a shopping day by many stores.

But Black Friday continues to be a consistently big day for most retailers and restaurants.

So find a coffee shop within view of a location of the franchise you’re considering, settle in with a cup of coffee and your laptop, and watch. Count the number of people (or shopping units, if you’re seeing families shopping together) who enter. Try to count the ones who come out with shopping bags if you’re watching a retail outlet, so you can extrapolate the conversion rate. Note the length of time you observed and write down the number of happy customers you saw.

Once you’ve finished your coffee and observation, repeat the test for a competitor of the franchise you’re considering. Do the same for other franchise business opportunities you have in mind.

While there is controversy over whether franchises are small businesses or not, many franchises will also observe Small Business Saturday the day after Black Friday. You can repeat your test. Small Business Saturday may be calm enough that you can go into the shop you’re observing and pay attention to the level of service they provide — but still busy enough that you won’t be too noticeable. Buy something to make sure.

You may learn more in a morning than you could in days of interviews.

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