Buying a Franchise

Is Your Franchise Business Special?

The whole idea behind a franchise is to apply a specific business system to a business in a new location. You’ll get a system that works, marketing plans and support that work, and day to day operations that work. In return, the franchisor gets fees and royalties.

But what if you’re convinced that it won’t work? We talked recently with a franchisee who was experiencing some frustration because, as he put it, “They don’t understand my market.” This franchisee doesn’t want to follow the franchise system because he has ideas that he thinks will work better in his neighborhood than the ideas the franchisor has.

This franchisee is already in business, so he has limited options. If you’re still deciding what franchise business opportunity to choose, you have more flexibility.

First, of course, make sure you get a sense of how the franchise would work in a market like yours. You’ll have the opportunity to talk with current franchisees, and you usually get contact information for franchisees in a town of much the same size and population density as yours.

But it makes sense to check census data before you accept the idea that you’ll have a similar experience. Some factors to check:

  • Age — Is your town an established community where older residents outnumber young ones? Buying habits can be very different from one generation to another. If the franchise business you’re considering provides nannies or home health care for the elderly, you certainly need to know whether the range of ages in your town is similar to the demographics in the town where your example franchisee works.
  • Ethnicity — Research on different groups often turns up differences in shopping behavior. For example, both Asian-American and Hispanic-American shoppers spend more on fresh produce, on average, than other U.S. shoppers. If your franchise opportunity depends on appealing to fresh produce buyers, ethnicity might matter.
  • Regional differences — The franchisee we spoke to felt that the regional character of his location is special. He figures people respond differently to marketing, they’re used to different ways of doing business, and the franchisor just doesn’t get his customers. Poughkeepsie might be different from Tampa. Talk with your franchisor and look for data on which to base your decision. Sometimes the differences aren’t emotional or cultural: if you have a mosquito solution to offer, make sure there is a mosquito problem for you to solve.

If you conclude that your franchise might really have different needs from other franchises, it’s time to find out whether that’s a plus or a minus. You might be offering something new to your community, in which case your awareness that your audience is special can make your business equally special. Talk with the franchisors you’re considering about ideas you have that might be a little bit outside the box and listen to their experience.

It might also be that the franchise business opportunity you’re considering is just a little bit outside the box for your community, and that following the system will make your franchise special in your community.

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