Podcast: Download (Duration: 7:20 — 6.9MB)
Are you considering venturing into the world of franchising? With numerous franchise concepts available, it's important to understand the different stages of growth that franchisors go through. In this post, we'll delve into the distinction between established brands and emerging concepts, shedding light on their pros and cons. Whether you're intrigued by a well-established franchise with hundreds of units or a hot emerging concept, we'll help you navigate the decision-making process.
Established Brands: The Plug-and-Play Models
When evaluating franchise opportunities, many people believe that only well-established brands with a significant number of units are worth considering. However, the reality is more nuanced. Some businesses develop their models so effectively that by the time they become a franchise, they are already highly established. These are the plug-and-play models, with over 100 locations or units.
The advantages of investing in an established brand are manifold. Firstly, you can expect a high level of capitalization, extensive business experience, and comprehensive support from the franchisor. Additionally, established brands have typically reached saturation in many markets, making it challenging to find suitable territories for new franchisees. However, if you're risk-averse, joining a well-established franchise that has been successfully replicated across various locations can provide reassurance and a higher likelihood of success.
Emerging Concepts: The New Kids on the Block
On the other end of the spectrum are emerging franchise concepts. These are newer models with limited units, often between four and fifty. While they may not have the extensive track record of established brands, they offer unique advantages that attract aspiring franchisees.
One significant benefit of joining an emerging franchise is the abundance of available territories. Unlike saturated markets, where established brands struggle to provide suitable locations, emerging concepts offer ample opportunities for securing prime real estate. As an early franchisee in a new model, you also receive special attention from the franchisor, including direct access to the founder of the company. This personalized support can significantly contribute to your growth and success.
However, not all emerging franchises are created equal. Some may lack the necessary infrastructure, resources, or business model to support rapid growth. This is where working with a franchise association company becomes crucial. They can evaluate whether a new franchise is prepared to expand and determine if they are qualifying the right individuals as franchisees. By conducting a thorough analysis, you can identify emerging concepts that are primed for success.
Striking the Right Balance
When considering franchise opportunities, it's essential to strike a balance between established brands and emerging concepts. The franchising landscape follows a bell curve, starting with new and emerging models, progressing to growth sectors with 50 to 100 units, and culminating in plug-and-play franchises with hundreds of units. While established brands offer proven success, they may lack available territories and face saturation challenges.
Ultimately, the right franchise opportunity for you depends on your risk tolerance, desired level of support, and market availability. Analyzing the pros and cons of both established brands and emerging concepts will help you make an informed decision. Remember, every franchise has its unique dynamics, and it's crucial to conduct thorough due diligence before investing your time and resources.
Whether you're looking to escape the W-2 rat race or fulfill your dream of owning a business, franchising can be a viable option. If you're interested in exploring franchise ownership further, franuniversity.com is an invaluable resource. Their comprehensive training program covers everything from selecting the right franchise to launching and running your business. Best of all, joining franuniversity.com is completely free, so take advantage of their resources and embark on your franchising journey today!