Less money is needed to advertise a startup if it has a well-known image and is well thought of by the public. The standard sign will bring the traffic into the business. This is a huge advantage over opening a business with no preconceived feelings for it. A good location with lots of traffic will help to make any known franchise do well since the buying public knows what the company is about and what they offer.
The franchise game plan
All major national franchises have very good operating plans, which are incorporated in any startup of the franchise. This fixed structure is a tried and true model for success. It has been repeated over and over and tweaked to perfection. They know the traffic they need to make a go of the franchise and they are experts at locating the right place to put a franchise. They have worked out the training of new employees and an efficient way to supply the new franchise. They have worked out the appliances needed to make a fast food franchise work at top production with little loss of effort.
A franchise like this can be replicated very easily and for some franchise owners this is exactly what they want. Others will feel constrained, but the success rate of these structured operations is hard to deny. The larger successful franchisors know what kind of person is likely to do well as a franchise owner and the amount of capital that is needed to gain success. Since they know the details that account for success, the potential franchise buyer would be wise to listen to these proven companies. If you have the money and the personality that they know is successful, then you should look very hard at one of these operations.
Turning down potential franchise owners
Franchisors have a vested interest in the continued success of newly added franchises. Since success is their goal, they will turn down buyers that do not meet their criteria. Usually this comes down to lack of money or the ability to raise the needed stake. If you are turned down, do not take it personally as they were probably doing you a favor by keeping you out of the business. If your funds are weak, this is usually the reason for the decline.
They do want to sell franchises, but they also want to sell to owners they feel will succeed. Putting a maybe in a good location could present long-term problems if the business fails due to cash flow. The location may have been fine in the long term, but the weak owner could not last until the cash flow caught up. A failed business at the location can sour it for other potential owners. Due diligence by both parties works when buying a franchise. Each party should check out the other to see if it is a good fit. If both agree, then that is a sign that the deal should work and become another successful franchise.
Since location is the name of the game
Buyers would be smart to check out any proposed location for themselves and not just depend on what they are told. The location should be checked for possible road changes or adjacent businesses leaving the area. Major franchisors have experts on staff that finds their locations and these are usually solid. However it never hurts to check for yourself. The demographics of the area surrounding the location and the physical location are critical to the success of the business. Having a major franchise name is important, but it will not overcome picking a bad location.
The statement, “He was a dummy, but he had a great location,” is true for many businesses. Where the business is in relation to its traffic can make or break the new franchise.
Franchise advertising can help
Major franchises can afford to buy substantial advertising over a specific territory that the single franchise owner could never afford. This is normally an advantage to the individual franchise owner. Major ad buys are designed to sell the name and not the individual locations. This bothers some owners, but in the long run it does help sell the franchise name. If the public has a good feeling for the franchise, it does help make the individual franchises better accepted.
Local radio ads and TV are usually helpful to the individual locations. Mailed coupons that list the participating franchises are also very helpful. Coupons in neighborhood publications are usually bought by the franchise that this coupon ad would help.
As with all other businesses, the repeating of ads does work over time. These ads keep bringing the name to the forefront. This constant reminder will capture some of the readers each time it runs.
Advertising by local franchises is usually limited to mailed coupons or small ads in local newspapers. A local group can buy some TV and radio time. It is difficult for the individual business to spend that kind of money. Ads with specials seem to work better than any other type of ad. You see these often in the insert ads in the paper.
The smart business owner sets aside an amount of money to promote the business during the year. This should be used for this purpose and spent each quarter as if it were the utility bill. Repeated advertising is the key to keeping the name in front of the buying public. Specials with expiration dates cause a sense of urgency and make the customer move on the offer. If also makes it easy to see if the ad was worth running.
Conclusions
A franchise, what’s in it for you? The first advantage is there is a high probability of success and therefore the fear of failure is overcome. The buyer feels confident that the investment will pay off if the franchise plan is followed. The fact that others have done what he is going to do and they now enjoy success is a comforting feeling to a new franchise owner.
Ongoing training and seminars also help to get the new franchise owner up to snuff. These programs are the result of trial and error. The franchise people have tweaked the program to the point that it s very hard to fail if the plan is followed.
Training on dealing with employees is very important, as this area is critical to growing the company. Employees that treat the customer right are an asset to the company. These employees are your company to the people they deal with and they must represent the company in the best way. This is a learnable skill and can be taught to the employees. All major franchises spend time on this element of the business.
A good franchisor offers training in all aspects of running a successful franchise. The best ones have really good programs that make it very difficult to fail when followed as taught.
