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.
Not sure how much can you afford?
Fill out our Franchise Affordability Calculator
Voyage Franchising
Related Articles
Open Your Own Independent Business or Buy a Franchise?
From the outset, you’ll have some obvious questions you’ll need to ask yourself before you can start formulating your own strategy to begin your venture.
New York Times Investigates Subway’s Abuse of Franchisees
New York Times investigation into the use of questionable practices by one its Franchise Development Agents that culminated in the agent acquiring two of a franchisees Subway stores.
The Fall of A Giant – Are Subway’s Healthiest Days Behind Them?
Not even a decade ago, Subway was the champion of healthy eating. In fact, they were the largest fast food chain in the world.
What Sub-Franchising Really Means
Sub-franchising is frequently confused with other franchise models, including area developers, master franchisors, regional developers.
Maximize Market Penetration and Branding with Multi-Unit Franchisees
Multi-unit franchising grows in popularity, in the Quick Serve Restaurant sector, this model continues to expand into other franchise sectors in popularity.
The Top 10 Franchise Grade Facts & Figures From 2017
Detailed studies on emerging franchise success rates, errors in Item 20 disclosure and sector performance, Franchise Grade’s reports help you.
A Road Block to Franchise Growth is Right Under Your Nose
New franchise growth is the top priority for emerging franchise brands. Many of these franchises have an obstacle on the road to more franchise locations.