Top Franchises Know Their Competitors

Published on May 09, 2017

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Having good competitor intelligence is important for selling new franchises and growing existing franchisee revenues. One major difference between the top franchises and the rest of the franchise industry is that the top franchises have an in-depth understanding of their competitors. Knowing which franchises are a threat to your franchise network development requires diligence and acquiring the right information. This means knowing who your competitors are – their strengths and weaknesses. I often hear comments from franchise executives that their franchise system is unique and impervious to competition. As my marketing professor told our class many years ago: “No one owns the market.”

There are two types of competitors that franchisors should know: direct and indirect competitors. Direct competitors represent franchises in your own business sector. Indirect competitors represent franchises in a related sector.

The first step towards knowing your competitors is identifying franchises that closely compare to yours. You’ll need to do a thorough analysis of their Franchise Disclosure Document (FDD) or use a company like Franchise Grade® to perform the analysis. It needs to include the franchise category, investment, royalty, litigation history, franchise growth and franchisee turnover plus more. From this you’ll know your top three competitors. Those are the franchises you want to target.

With this information, you’ll know:

  • How you compare to top franchise competitors in the key performance areas
  • Which areas of your franchise you need to improve
  • Which parts of your franchise system that you’ll want to emphasize
  • What strengths set you apart from your competitors such as fees, territory, franchise term, etc.

Because franchisors compete with other franchisors for the same investment dollars, it’s vital that each franchisor is fully aware of their competitors and the key aspects of their franchise program.

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

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