As franchising continues to grow despite the pandemic, new concepts are entering the space offering franchise opportunities across most industry segments. This has been occurring at a rapid clip for the past few years and is anticipated to continue for the foreseeable future. That means that in addition to exploring opportunities with household names like Taco Bell, FastSigns and The UPS Store, candidates now have options to explore new brands such as Pepperoni’s, Outlaw FitCamp and Code Ninja. These newer brands are referred to as emerging brands while the former considered legacy brands.
With this new wave of brands, candidates are faced with questions beyond the norm. Instead of just focusing on investment level, industry segment and competition they will ask about the difference between legacy and emerging brands and advantage of one over the other. They’ll also ask specifically about an emerging brand head-to-head with a competing legacy brand that may clearly be the leader in that industry segment. They’ll wonder, isn’t it safer to invest in a recognized brand with a proven system as opposed to investing in something new and relatively unknown?
Let’s look at the obvious differences.
Typically, the brand has been developed over many years. In some cases, 20-50 years or more. There’s a relative level of success as exemplified by the sheer number of locations across a region or across the country. The perception of success is even greater. The brand name is well known from geographic locations to a multitude of advertising. Some by slogans and spoke persons – Who doesn’t know, Double A ‘Beep Beep” MCO (AAMCO) or Colonel Sanders (KFC) real or lookalike? For training and support there’s most likely an impressive corporate office with various departments and possibly local field offices or training centers.
The brand or initial business from which the franchise has been developed is well known locally. The founder is also well known and may be a local hero, of sorts. Customers live in the founder’s neighborhood with some knowing him or her from way back when. The brand is viewed as the antithesis of the big chain attracting customers like a magnet.
So, with these obvious differences, why invest in an emerging brand? It really does come down to personality and specifically willingness to tolerate a higher-than-normal level of risk, desire to communicate directly with the founder, desire to get in on the ground floor and opportunity to help mold the brand. Yes, it’s an entrepreneurial personality that is attracted to emerging brands and is probably the best answer to-date in the ongoing debate about whether or not a franchisee is an entrepreneur? Well, let’s leave that for another day…
In upcoming editions of Acceler8Success Cafe, I’ll take a deeper dive into the difference between legacy and emerging brands, and I’ll address the relatively new brands that have rapidly grown beyond the emerging brand category but certainly not to be considered a legacy brand. A couple of exciting brands immediately come to mind including Teriyaki Madness, Mosquito Joe and Crave Hot Dogs and BBQ. In addition, I’ll take a close look at a fast-growing segment of franchising, the multi-brand franchise systems offering complementing opportunities. Last, I’ll also be exploring a booming segment of franchising – home-based and home services businesses, both offering relatively low initial investments levels and flexibility, opportunities in high-demand by Millennials and Generation Z and also by Seniors.
Although franchising offers a plethora of opportunities across many industry segments and investment levels, diligence is even more important than ever before. So, if you’re considering owning a franchise as the next step in your career path, PLEASE, DO YOUR HOMEWORK AND MORE!
Question of the Week:
Is it safer to invest in a recognized brand with a proven system as opposed to investing in something new and relatively unknown?
Other articles at Acceler8Success Cafe that are relevant to buying a franchise include:
And a great article by The Franchise King, Joel Libava: