Article by Chris Conner, Franchise Marketing SystemsÂ
When investing in a franchise, understanding the implications of every decision, big or small, is paramount.
Being familiar with the local market, analyzing data, and executing the franchise in a unique, innovative way are just some aspects that investors should be aware of long before they open their wallets.
Our Franchise Marketing Systems (FMS) has been operating in the franchise industry since our inception in 2009. FMS operates like a partnership, working side-by-side with investors and franchisees to help them make informed decisions.
With over a decade of experience, particularly with smaller franchise systems, FMS offers premium coaching to help franchisees avoid the overhead of hiring an executive. Our extensive data and examples support our goal to provide optimal advice for navigating the complex world of franchises.
2024 has been an interesting year at FMS. The lesson as we move into the 2nd half of the year is the importance of a restaurant concept finding differentiation in a saturated market to successful franchise strategy.
Table of Contents
Understanding the Market Landscape
In a saturated market of franchise concepts, understanding the differences between brands is crucial. One key distinction is between small and large brands. The size of the brand can determine the relationship with the franchisor. Establishing a relationship with a franchisor, ensuring their team is geographically close, and prioritizing positive relationships are vital.
Smaller franchises often provide more personalized support, which can be a significant advantage. Conversely, larger franchises may lack these relationships but offer other benefits.
Role of Market Research
Market research is essential in understanding the differences in franchise concepts. Falling in love with a segment or product is easy, but understanding market potential is crucial. Today, accessing data through databases and polls helps investors avoid overcrowded or unwanted franchises.
The best franchise investors undertake fact-finding missions using the Franchise Disclosure Document (FDD). This information provides an edge, making franchises distinct from opening an independent business. With accessible data, investors can make informed decisions before significant financial commitments.
Technology and Marketing
Technology and social media play a significant role in leveling the marketing playing field for franchises. A dynamic social media presence can be immensely beneficial.
For example, Teaspoon, a boba tea franchise in Northern California, excels in a crowded market through social media. They have sold 84 units in 4 years, demonstrating the power of an effective social media strategy.
Creating A Unique Customer Experience
Investing in a creative menu, seasonal offerings, and innovative promotions sets franchises apart. Effective use of influencers and engaging video content can drive customer interaction and loyalty. These strategies create a unique and memorable customer experience, encouraging repeat business.
Location Strategy
In the digital age, the necessity of prime locations is evolving. While some businesses, like coffee shops, still require central locations, others can thrive with a strong digital presence.
For instance, food service models conducting a significant portion of business via delivery might benefit from more cost-effective locations. Balancing location strategy with business model and operational needs is critical.
Labor Considerations
Labor is a critical factor in franchise operations. Finding the right person to manage HR responsibilities, such as hiring and transitioning staff, is essential.
Efficient labor management reduces costs and ensures smooth operations. The potential future of robotic servers is also a consideration, offering potential labor cost savings and operational efficiency.
In summary, standing out in a sea of franchises requires understanding market dynamics, leveraging technology, creating unique customer experiences, and strategic location and labor management.
We are here to help. For more information about FMS and how we can assist in navigating the franchise landscape, visit our website at Franchise Marketing Systems or send me an email at chris.conner@fmsfranchise.com
