Franchising has become a popular avenue for entrepreneurs seeking to expand their businesses and reach new markets. With approximately 300+ new franchise concepts launching each year, the landscape is highly competitive. These emerging franchises, along with other brands in the same category, represent an increasing percentage of opportunities available in the franchise industry today. However, the challenge lies in offering franchises without the advantage of brand recognition.
When a new franchise company enters the market, the founder becomes the face and embodiment of the brand. The founder’s passion for the business, their interactions with customers and employees, and their local marketing efforts all contribute to the brand’s image. Initially, the franchise candidates are often existing customers who inquire about the business’s franchise potential. These individuals have witnessed the founder’s success firsthand and are inspired to establish a relationship with them. They perceive the opportunity as a ground floor venture with direct access to the founder, which increases their confidence in the franchise’s potential success.
To leverage this initial interest, public relations efforts should be employed to highlight the founder’s accomplishments and maintain a positive reputation. This approach allows the founder’s influence to attract prospective franchisees who believe in the brand’s potential. In the early stages, expanding locally within the same market as the original business and first franchise location is recommended. This strategy allows for brand awareness to take hold in the local area and surrounding suburbs while establishing support systems and economies of scale. Once the concept gains traction and stability, expansion can be pursued outside the initial market.
However, it is crucial to exercise caution and focus development efforts on a limited number of cities in proximity to the corporate office. Taking requests from candidates nationwide can be financially risky for a new franchise company. By concentrating on one or two cities in close proximity to the corporate office, the company can provide hands-on support while minimizing travel time and expenses. A general rule of thumb is to limit early-stage development to a 4-hour drive or a 2.5-hour flight from the corporate office market. This proximity allows for effective support and guidance without undue strain on resources.
As franchise locations begin to establish themselves in these markets, the concept can be promoted in additional cities or regions. This “hub & spoke” model entails identifying new hub cities and expanding outward to the suburbs and neighboring regions. Each hub serves as a launching point for further expansion into nearby markets and sub-markets, essentially connecting the dots to create defined areas of brand saturation. By gradually building brand awareness and support systems, the franchise organization can create a network of hubs & spokes that forms the model and foundation for regional and ultimately, national expansion.
Controlled growth relies on the founder’s ability to exercise restraint and avoid rapid expansion or venturing too far from the core group of franchise locations and subsequent hubs. Adequate support, efficient ad cooperatives, and brand development can only be achieved within a manageable geographic range. It is essential to strike a balance between growth and maintaining the brand’s integrity and quality across all locations.
To summarize, success for emerging franchise brands is based upon early-stage efforts to control growth. A founder’s clear vision and commitment to a structured development plan, coupled with active participation in the franchise award process, are crucial elements for success. Without a controlled approach, the franchise system risks missing development goals, disappointing stakeholders, and engaging in reactive decision-making. By proactively implementing a well-thought-out plan, emerging franchises can navigate the challenges of brand recognition and achieve long-term success in the competitive world of franchising.
Resources & Support
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For an initial no-obligation discussion about your emerging franchise brand, you can reach me via a LinkedIn message, by email to Paul@Acceler8Success.com, or by phone or text at (832) 797-9851.
Learn more about resources and support for franchise and restaurant brands at Acceler8Success.com. If you’re interested in coaching for current and aspiring entrepreneurs (and founders of emerging franchise brands), please visit Entrepreneurship411.com.
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