Skip to Content

Franchisors Should Have Key Competitor Statistics

Published on August 25, 2017

Share Tweet Share

Since franchisors operate in a highly competitive environment it’s critical that franchise development staff have as much data on their competitors as possible. Their knowledge should extend beyond knowing the initial franchise fee, quality of the franchisee territory, royalty fee and details regarding Item 19 disclosure. This type of information, which is accessible for prospective franchisees in an FDD or a franchisor website, provides limited insight into a competitor. As franchisee candidates review their investment options they will acquire crucial information.

Franchisors need to have the in-depth knowledge to why their franchise investment is the best option for them. Imagine a member of franchisor staff being unable to answer a question asked by a candidate? This lack of knowledge won’t invoke confidence on the part of the candidate.

Franchisors that have a knowledgeable franchise development team present competency, knowledge and credibility to franchise candidates. When a prospective franchisee asks a question about a competitive franchise they are able to answer it with quantifiable data.

The confidence that is earned by having the answers at your fingertips is invaluable in the franchise sales process.

Once you’ve identified your franchise competitors you should have the following statistics:

• Number of franchisor law suits as a percent of franchise locations
• Net franchisee growth based upon new locations minus recent closures
• Rate of franchisee growth for minimum of 2 years
• Amount of Sold But Not Opened franchises for most recent year
• How the franchise compares and benchmarks to franchises in the same category, sector or overall industry

Prospective franchisees who are looking to invest, need to have confidence in the knowledge and professionalism of the franchisor staff. By understand the offerings of franchises that are operating that same marketplace, franchisors can distinguish why they are different, why they should earn a prospects franchise investment. Being aware of your strengths and weaknesses will help your validate why your franchise is the best option for their investment.

About the Author: Ed Teixeira
Ed Teixeira is a recognized franchise expert with over 35 years experience in the franchise industry. He has served as a corporate executive for franchise firms in the retail, manufacturing, healthcare and technology industries and was a franchisee of a multi-million dollar home healthcare franchise. Ed is the author of Franchising From the Inside Out and The Franchise Buyers Manual. He has participated in the CEO Magazine Roundtable Meetings with business leaders from around the country and spoke at a number of venues including the International Franchise Expo and the Chinese Franchise Association in Shanghai, China. Over the course of his career, Ed has been involved with over 1,000 franchise locations and launched franchise concepts from existing business models. Ed can be contacted at 631-246-5782 or

Thinking about buying a franchise?
Not sure how much can you afford?

Fill out our Franchise Affordability Calculator

Related Articles

Franchising and Murphy’s Law

When it comes to franchising, Murphy’s Law comes into play more often than desired. In many cases, a new franchise takes off slower than anticipated.

Read More

Growing Your Franchise System Takes More Than Leads

The emphasis on franchise system growth is as old as franchising, having been accepted as the indicator of a quality franchise.

Read More

Franchisors Need to Avoid Wasting Their Franchisee Leads

When franchisors strategize their system growth, the major focus is placed on the amount and quality of their franchisee leads.

Read More

The Two Traits You Need in A New Hire

After owning 4 successful businesses, in different business sectors, there are two common attributes my good hires have shared; Curiosity and Tenacity.

Read More

Monitoring your Consumer Sentiment Is Key to Selling your Franchise

In the franchise industry, franchisors can view comparisons and relationships between consumer satisfaction for the products or services a franchise offers.

Read More

The TOP 4 Traits Of A Successful Franchise System

These traits lead to low franchisee turnover, an attractive investment opportunity, outlet growth and brand recognition and consumer satisfaction.

Read More

The #1 Reason You Are Scared to Open Your Own Business

Owning a business is hard. Each venture has its differences – different customers, different go-to-market strategies, different business partners.

Read More