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Researching a Franchise

Signing Up With An Emerging Franchise

Getting involved in a new and emerging franchise can be risky. But it can also be phenomenally profitable. The trick lies in identifying those franchises that are on the cusp of exploding and offering 1 000% returns.

David Nilssen

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In 1955, multi-mixer salesman Ray Kroc saw the future in hamburgers and opened the first McDonald’s franchise location in Des Plaines, Illinois. Today, more than 80% of the 36 000 worldwide McDonald’s locations are franchises.

Every superstar franchise starts as a new brand. Entrepreneurs who get in on the ground floor can potentially reap great rewards.

We-recommend-tickWe recommend: Passion Project with Sport For All

“Think of it like the stock market, where early investors can score big,” says Brent Dowling, chief operating officer at RainTree, a franchise consulting company.

“Imagine being one of the first 20 McDonald’s franchise owners. When the smaller franchises become big, that’s where we see 1 000% returns.”

Beyond the money: Input and influence

An often-cited benefit of early ownership is the chance to influence the franchise systems. “Established brands just want you to follow the programme,” says Terry Powell, whose company, The Entrepreneur’s Source, helps individuals find the right franchise concept for themselves. “Early franchisees get to be part of the development and have their ideas listened to.”

Serial entrepreneur Amy Lewallen has more than ten years’ experience as an early owner in three different emerging wellness and fitness brands: Fitness Together, Elements Therapeutic Massage and her current Iron Tribe Fitness centre in Washington in the US. She’s drawn by the opportunity to influence the rollout of new concepts as the franchise grows.

“I saw the chance to help steer the brand,” she says. “You just have to know there will be growing pains.”

Franchisors know how important this input and influence can be. Anna Phillips, CEO and founder of emerging brand Lash Lounge, actively looks for franchisees who are ‘team players, flexible with change and able to help provide solutions to gaps that will improve the overall franchise organisation.’

She views her franchisees as ‘contributing pioneers’ who benefit from prime territory selection and lower franchise fees. RainTree’s Dowling notes that early owners also receive direct support from founders eager to prove success in new markets, along with the chance to be involved in “decision-making for the entire franchise brand, from new products or services to systems and processes.”

Mitigating the risks

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As with any investment, there are liabilities to being an early adopter. “Without a track record of success in different markets, there is the risk that the brand just isn’t as replicable as predicted,” says Dowling.

Success may not be immediately apparent either. It can take a while for emerging brands to reach what Terry Powell calls the stage of critical mass, when growth begins to happen more rapidly and exponentially — from his perspective, that’s around 75 units.

And franchisor Phillips is frank that emerging franchises are still building brand recognition and growing their internal team with systems that don’t always provide the support owners expect from more established franchises.

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Powell’s 32 years’ experience in matching entrepreneurs with franchise opportunities has also taught him that prospective franchisees can sometimes be their own greatest danger.

“People think it’ll be like falling in love, but it’s better not to think of a right fit in purely emotional terms. A franchise is a vehicle to accomplish your lifestyle, wealth and equity goals.”

How do you decide if an emerging franchise is right for you?

In the absence of an extensive track record of financial performance, entrepreneurs need to dig deeper and research creatively. Focus on the business model, the direct experience of owners already in the system and the values and culture of the franchise.

Business considerations include:

  • Is there a clear demand for the product or service offered by the emerging franchise?
  • What key differentiators does the franchise bring to the market?
  • Is the franchisor team professional and experienced?
  • What is the performance track record within existing units?
  • How many units have closed and why?

Are the current operations, marketing and training systems understandable, usable and streamlined? Lash Lounge CEO Phillips says, “If the early systems look organised and well-developed, it is a fair assessment that they will continue to grow and provide great support as the franchise becomes more established.”

  • Does the business model meet your income and lifestyle goals?
  • Do you have the marketing and sales skills to help build brand awareness?
  • If the emerging brand is a new concept, how comfortable are you with being a pioneer?

Make sure you talk to as many current owners as possible. Amy Lewallen advises that you insist on being put in contact with struggling owners as well as successful ones, so you can gain insight into the real challenges of the business and evaluate your own ability to respond to them.

“This is likely to be the most important part of your research process,” says Brent Dowling. “In addition to asking existing owners about their profits and losses, timeframes and milestones, the most important question is, ‘Would you do it all again?’”

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Finally, it’s vital that you’re comfortable with, and excited by, the vision, values and culture of the franchise. Your success depends on your long-term engagement with the brand. Amy Lewallen’s approach is to ask herself, “Is there anything about this brand that I wonder if I can live with that or not? Because when you buy in, you’re married to that brand, and what they believe in, you have to believe in.”

David Nilssen is the co-founder and CEO of US-based Guidant Financial. The company helps entrepreneurs invest their retirement funds into a business or franchise without taking a taxable distribution or incurring penalties.

Company Posts

With Hundreds Of Franchise Options Out There, Choose The One You Can Trust

If you’re looking to invest in a business venture that offers you years of experience in the industry, the trust and loyalty of its customers, and franchise support from an expert team – then Hi-Q is the one for you.

HI-Q

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What you’ll become a part of

Since opening their doors in 1999, Hi-Q has gone from strength to strength, growing a humble three store enterprise into an extensive 130-store franchise network with a unique multi-product and multi-services automotive offering.

Hi-Q’s approach to business is centred around being ‘the one you can trust’ to their customers, their suppliers and their franchisees.

“That has always been the key driver in everything we do,” says Sean Harrison, Hi-Q’s Managing Director. “For example, when it comes to our customers, they need to know they can rely on us to put their safety first.

Related: Don’t Tread On Toes – Why Investing In A HIQ Franchise Will Offer You More Opportunities

That we’ll always strive to offer them expert, friendly service and top of the range products, while also keeping up-to-date with the latest technologies and advancements in our field.”

An acclaimed and awarded brand

Hi-Q has again and again proven themselves to be a leader in the industry.

They’ve been voted South Africa’s No.1 tyre retailer for eight consecutive years (2010 – 2017) by consumers in the Ask Africa Icon Brands Survey, the biggest of its kind in Africa – a clear indication that they are respected and trusted by their customers.

Business support

Hi-Q Franchisees all have the support of an expert and knowledgeable team with years of experience in the industry, who are available to guide them on their business venture. This includes areas of business such as marketing/promotional, commercial, organisational structure, tools and equipment, sales and more.

Franchisees also have access to various skills training opportunities for members of their team.
Hi-Q is invested in providing their network with the tools needed to thrive and grow in an ever-challenging market.

Relationship with Goodyear

Hi-Q has the support and backing of international tyre of multinational premium tyre manufacturer, Goodyear, and its full value proposition. This means access to incredible promotional and marketing opportunities in partnership with the brand.

Franchising opportunities

Hi-Q has embarked on an extensive expansion plan and have identified areas of opportunity to extend their Franchise footprint growth countrywide.

You’ll find more information on our website www.hiq.co.za We’d like to invite those who are interested to become part of our team to contact 011 663 2431 or bernie_andrews@goodyear.co.za

Related: We Want To Invite You To Join Us On The Hi-Q Journey And Become A Franchisee

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Researching a Franchise

The Digital Headaches Of A Franchise Marketing Team

Here are my top 5 tools that can help control and regulate franchisees marketing with minimum friction.

JG Bezuidenhout

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Franchise marketing teams already know that managing campaigns for a business with multiple locations and/or stores is a time-consuming job.

When it comes to online marketing, many franchisees are frustrated with the mother brands’ national campaign strategy, as it may not suit their immediate needs. This often means they embark down the dangerous route of “rogue” or unapproved campaigns.

This is a huge risk for any brand as there is limited to no control over the message and quality of creative, often resulting in brand CI and best practices not being followed.

Rogue advertising can be totally avoided by a franchises’ marketing team by employing tools that allow them to set up a managed process where franchisees can advertise through. With a managed approval process (preferably automated) it is easier to manage “rouge” content.

Here are my top 5 tools that can help control and regulate franchisees marketing with minimum friction.

1. Create a consistent Facebook content experience whilst still allowing your franchisees to post to their own page

Facebook location pages makes it possible to, as an alternative, allow every store to open a Facebook page, each with different versions of your logo as their profile picture, as well as incomplete profile data or even old or past promotions as their cover image. You as a brand manager can set up each store as a location page on the brand’s main FB page.

The pages can all be linked to the main page and if you change the profile image or cover art, it will automatically update all the other pages. There are also a number of other marketing advantages to this, but most importantly for me was the ability to manage them all from a single interface and clean up all the old and abandoned pages that just confused customers.

2. Manage social media content

Gain is extremely simple to use and connected to all the popular social media platforms such as Facebook, Twitter, LinkedIn etc. As a user, you can create posts or ads and schedule them all from the same window. Once said posts are scheduled, the marketing team can preview the content and approve it for publication or request changes all within a matter of seconds.  Best of all, nothing will get posted without your approval.

3. Free professional looking content in a template

Pablo is an old favourite of mine! It supplies predefined size templates where a user can use free professional stock photos and quickly overlay text. The feature I love most on this tool is the “insert logo” feature, which with the click of a button can overlay a banner or brand element that creates consistent content experiences. Once done, you can export the image and post it to gain for approval. Simple right!

4. Create email alerts for when your brand is found online

Talk Walker alerts is a nifty tool and acts like your personal internet detective who constantly crawls the internet for keywords that you define. I like to use my clients’ brand names and sometimes even my competitors just to keep tabs on their activity. Once set up, you receive daily emails with links to the content in question.

5. Pre-approved marketing creatives and targeting with machine learning optimisation

Lead Gener8or tool can define a bespoke target audience per store and lock advertising geographical areas to prevent any cannibalisation. Once completed, franchisees can execute pre-approved marketing campaigns as and when they wish on any of the integrated channels (SMS, Email, Facebook, Google and Youtube), without any further involvement required from the marketing team.

Powered by big-data machine learning, campaigns are automatically optimised while in flight. Marketing teams can monitor all campaigns in real time. This tool really is a game changer for franchise marketing teams and brand managers.

With these tools correctly implemented into your business, the digital headache of your franchise’s marketing team can subside and focus on what you do best, delivering results!

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Company Posts

Choose A Job You Love, And You Will Never Have To Work A Day In Your Life

Join Col’Cacchio’s 26-year-long love story.

Col'Cacchio

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Vital Stats

  • Joining fee: R125 000
  • Monthly management fee: 6% of turnover
  • Monthly marketing fee: 2% of turnover
  • Total investment: approx. R2.5m to R4.2m (turnkey) Size: 140m2 to 350m2
  • Unencumbered cash (before loan): 50% of total investment

(Above figures exclude VAT) 

“Owning your own restaurant is like owning your own future.” – Dominic Dempers, Franchisee Durbanville, Belvedere & Meadowridge Cape Town

We’re looking for passionate franchisees who will love our brand as much as we do.

Why you should join this delicious success story

colcacchio-pizza-franchise-dessert

  • Assistance with site selection & lease negotiation
  • Store design & build
  • Full training provided for management and staff
  • Marketing & operational support
  • Product innovation & menu development
  • Efficiency in all systems
  • Healthy margins.

Related: 300 Business Ideas To Inspire You Into Entrepreneurship

#FoodwithaStory

“Our journey started with a single restaurant on the foreshore with the aim to serve the very best pizza around” – Greg Mommsen, Business Development Director

“Watching this brand grow and empowering people has been immensely rewarding. We have staff that have been with us for over 20 years. It’s like a family, we work hard, we laugh, we cry, we celebrate and of course, we eat a lot of pizza.” – Michael Terespolsky, Founder and Managing Director

“Becoming a franchisee is an amazing opportunity to join the family and become part of the Col’Cacchio success story. We’re 100% behind out franchises at every step, making sure that we all continue to learn and flourish” – Greg Mommsen, Business Development Director

“It has been filled with challenges along the way, but all the rewards have made every moment worth it.” – Michael Terespolsky, Founder and Managing Director

Related: Got An Awesome New Business Idea? Here’s What To Do Next

Visit www.colcacchio.co.za or call Tarryn Godley on 084 800 7264 and let’s get this adventure going.

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