COVID-19 has made an indelible mark on the way businesses of all sizes operate and will directly impact the way franchise brands are bought and sold moving forward.
In many ways, the pandemic is like a once-in-a-lifetime hurricane that devastated the entire country. Despite the devastation, we recover from hurricanes, and we will recover from COVID-19. The weaker franchise concepts will be weeded out, just like the homes and buildings that were weak and vulnerable before hurricanes destroyed them. The strong franchise brands will become stronger, and new brands will emerge from the ashes to capitalize on new business opportunities in the market.
The way franchise candidates evaluate and select franchise brands will also change. Candidates will be more deliberate, less impulsive, and hungry to find trusted experts who will provide the information candidates need to navigate the decision-making process.
As the CEO of one of the leading franchise marketing agencies in the country, we have provided marketing services to more than 150 franchise brands over the past decade. Based on that decade of experience, I have identified five key characteristics that the best franchise brands possess:
- Transparent / High Character Team
It is a simple as this – successful franchise brands are a direct reflection of the character and collective talent of the leadership team. The best management teams are senior level, with proven success running successful brands.
Successful companies insist on everyone in the company being authentic, honest, and transparent with employees, partners, and franchise candidates.
They are confident and profitable enough to shoot it straight with you if they are not a good fit for your future aspirations. Not only can they articulate their competitive strengths and weaknesses, they are not afraid to be transparent with prospective franchisees about the investment, the earnings potential and their market position based on real data.
- Clear Brand Position.
Successful franchisors understand that to create a strong brand identity, you must stand for something. For example, you cannot build a beef jerky outlet brand and be concerned about what vegans may think of your brand messaging to meat lovers.
The best franchise brands have a strong brand marketing vision backed by consumer research and the financial resources to bring it to life and convert it into a national powerhouse.
- Is this a baby business or a small business?
As Newt Gingrich famously said, “there is a difference in investing a small business and a baby business.” A small business is self-explanatory. A baby business is a small business concept that will grow into a larger, scalable brand given the right combination of talents and resources.
if the franchise brand has stalled or plateaued, your evaluation should consider if it is due to inherent weaknesses in the overall brand concept, the management team’s skill set, or propensity to invest enough in the brand to fuel future growth.
- They have a vision and a plan for growth. And it is all about the numbers.
Does the brand have a clear vision of not only company success but also what your future success looks like? Do they have a comprehensive, data-validated growth plan with clear goals, metrics, and timelines?
Great franchise brands are all about data analytics, including having a firm analytical grasp on the real customers of their franchisees – the customers you will be counting on to drive profitability in your new business. They have proven data about your future customers; how many potential customers are in the territory you will be securing, data on their online and social media behaviors, what messages they respond best to, etc. They also have analyzed the same data for their top competitors.
- They have a robust operations and marketing system in place to ensure your success.
You are evaluating franchise opportunities because you want to leverage a proven sales, marketing, and operational system versus starting a company from scratch. To me, it comes down to three things.
First, the talent of and the chemistry you have with the franchisee operations support team. Second, the marketing resources they have on staff and the marketing agencies they have under contract. The third leg of the stool comes down to the operational and marketing technologies they deploy across the system to ensure your unit level economics.
Good luck on your exciting and perhaps scary journey to determine the right business investment for you and your family! I hope that my franchise marketing experience has given you some insight into buying – versus being sold – on the right franchise brand for you.
David Chapman is the Founder and Chief Brand Strategist of 919 Marketing Company, a nationally recognized franchise marketing agency. David is a contributing writer for Forbes, and 919 Marketing is recognized by INC as the fastest-growing franchise content marketing agency in the country. He can be reached at 919-459-8156 or email@example.com.