Figure out why is your franchise different–and sell that to franchise buyers.
If you are thinking about starting a franchise, you have a whole lot of company. FranData reported a record 500-plus new companies began offering franchises in 2006 alone–bringing the full total, at least by some counts, to over 4,500 active franchisors in the U.S.
With that lots of franchisors for franchisees to pick from, how do you stick out from the crowd? How would you create a distinctive Selling Proposition (USP) that may allow you to compete keenly against your competent brethren?
Finding Your Small PondWhen facing the duty of fabricating this USP, you should begin by knowing that every buyer’s universe differs. No franchise buyer would ever try to analyze all 4,500 franchisors available on the market.
Some begins by choosing a particular industry segment where they want. Perhaps they have always wished to own a restaurant. Maybe they would like to buy a franchise that capitalizes on the particular group of skills or experience. They could narrow the list predicated on how they examine the marketplace–whether by using brokers, industry events or franchise directories. Or simply they’ll utilize the more encompassing–and more readily searchable–internet to greatly help them to narrow their search.
Some will be interested only in established franchisors, while some will be seeking to get in on the "ground floor" of a franchise poised for explosive growth. Many will eliminate franchisors quickly predicated on size of investment and their available capital. In a nutshell, every buyer’s process–and her or his franchise universe–will be both different and smaller compared to the universe of most available franchise concepts.
For you personally, as a fresh franchisor, this is very good news. Although most franchise buyers aren’t fishing in your pond, the buyers that are will be fishing in a much smaller body of water. Which means an understanding of your unique pond, and what fish are in it, ought to be the first order of business.
Armed with this knowledge, you need to then narrow your buyer profile whenever you can.
Part of this process could be intuitive–a chiropractic practice will surely want to spotlight chiropractors–but even that knowledge won’t reach buyer motivation. More regularly, the only way to essentially obtain this understanding is research–talking to either your own franchisees or the franchisees of your closest competitors. (And if direct competitors aren’t readily identifiable, a good good knowledge of "comparable" franchises will be much better than no research at all.) This data provides insight concerning buyer motivation, media, "hot buttons" and the precise message which will sell to your audience.
THE COUNTLESS Sales of FranchisingThe savvy franchisor also instinctively realizes that there isn’t simply one sale to create, but instead four separate sales that all franchise salesperson must undertake. Prospects tend thinking about four basic questions:
- MUST I get into business for myself?
- MUST I go in to the widget business?
- MUST I go it alone or buy a franchise?
- MUST I purchase your widget franchise?
The response to the first question, of course, is a mainstay of any franchise sales presentation. But this answer will be similar for some franchisors–allowing little room for a really unique selling proposition.
Again, the response to the second question will surely should be woven in to the fabric of your sales and marketing strategies. To answer this question, you must understand and develop the selling proposition for the widget industry, but it’s likely that that selling proposition isn’t "unique"–it is a shared message promulgated by all of your closest direct competitors. Only once you’re in the enviable position to be the only player in market segment can this question yield a genuine USP.
One cautionary note here: Being first to advertise is rarely enough. For almost all franchisors, there are specific to be imitators. So if a market-based USP is usually to be the building blocks of your value proposition, you need to quickly establish yourself as the dominant player in the marketplace–as first in will not indicate you’ll capture the dominant brand position in the long-term.
The 3rd question offers little room for uniqueness. Do you offer any support services not provided by others in franchising? Do you provide any guarantees? For some franchise concepts, as the question is integral to franchise sales, the answer will be similar across a large number of franchises.
Therefore the core of the USP lies not in differentiating an idea from the vast herd of franchisors, however in differentiating it from your own closest direct competitors. That’s where you should focus your creative efforts.
Putting the "U" in USPU means unique.
While certainly a behemoth now, the McDonald’s juggernaut started with an individual location. Before they captured the American consumer’s "mind share" for fast-food burgers, that they had a large number of competitors.
Some people still remember companies like Burger Chef, Dee’s Drive In, Sandy’s, Red Barn and Druther’s (which, to provide you with a feel because of its originality, began its life as Burger Queen). Geri’s, that was partly owned by a former vice president of McDonald’s, had numerous similarities to McDonald’s, like the usage of a cartoon icon that was nearly the same as McDonald’s. Another concept, Wetson’s was basically made to duplicate the McDonald’s concept, but rather than "Search for the Golden Arches," Wetson’s used the slogan "Search for the Orange Circles."
Why was Burger King successful while so numerous others failed? While there have been numerous contributing factors, the primary factor could be boiled down to an individual sentence: "Own it the right path." Burger King positioned itself to vary from McDonald’s, not really a "me-too" operation. More important, they positioned themselves in ways in which McDonald’s cannot respond competitively–because to carry out so, McDonald’s could have had to revisit their entire kitchen operations.
Years later, nobody thought any burger operation could crack the marketplace, yet Wendy’s did. Their secret: "We Don’t Cut Corners by Making Square Burgers." While McDonald’s and Burger King were slugging it out, trying to fully capture the hearts and stomachs of the country’s children with Happy Meals and cartoon characters, Wendy’s was hiring an octogenarian spokesperson and touting their freshly ground "old-fashioned hamburgers" and asking "Where’s the beef?"–targeting a different customer from the Big Two.
Several Way to Skin a CatAs the above examples illustrate, there are a variety of ways that a company can differentiate itself. Of course, it starts at the buyer level. For those luckily enough to be the first right into a new industry or industry niche, the most dominant position to get is that of market leader within the segment. For doing that status, a company must generally grow rapidly enough to accomplish brand recognition.
For ordinary people, we need to end up being the best at something. To paraphrase from retail consulting firm McMillan|Doolittle’s groundbreaking study on successful plan, one should be the "best" at something–either the largest (most assortment), cheapest, fastest, easiest (best service) or hottest (fashion). McMillan|Doolittle continues on to point out a company can perhaps make an effort to be two of the things simultaneously, but companies that make an effort to be "everything to all or any people" find quickly they’ll only succeed at being mediocre at everything–a guarantee of long-term failure.
Apart from the concept itself (always where to start), you can even differentiate yourself predicated on size of the original investment, marketplace (either at the franchisee or consumer level), target geography, quality of services provided to franchisees and even franchise structure. Another cautionary note: For all those with an undifferentiated concept, being the "cheapest" is usually a road pitted with disaster. Those taking this route should concentrate on minimizing the franchisee’s investment, and generally not on minimizing the royalty structure.
No matter where this differentiation occurs, it really is imperative that you "stake out" the areas where you intend to excel, create a USP around those areas and acknowledge the areas where you’ll allow your competition to play unabated. In the event that you follow these steps, you should have developed the first key to successful franchise marketing. Unless you, remember the Orange Circles.