When considering franchises in highly competitive sectors, deciding which one to invest in can be challenging. For example, if you’re interested in a pizza franchise, numerous brands operate in Canada. How do you choose the right franchise when there are so many options?
Assess the Franchise from a Small Business Owner’s Viewpoint
Evaluating each franchise from a consumer’s perspective won’t suffice, especially in the early stages of your research. Instead, focus on the metrics. Understand the operations from behind the counter and the desk. Investigate how the marketing functions. Ask the franchise representative about the franchisor’s strategies for helping you attract new customers.
Identify the Unique Selling Proposition (USP)
The USP distinguishes each opportunity in a crowded market. Ask the franchisor what sets their brand apart from others in the same space and what they consider their USP to be. Once you have the USPs of the brands you’re evaluating, determine if they truly offer something unique compared to the competition.
Ask the Critical Questions
When exploring a highly competitive franchise category, it’s essential to ask probing questions before making a decision. Consider the following questions:
- What is the failure rate?
- How many franchises have you sold this year?
- How many franchises did you sell last year at this time?
- What is the top reason you would recommend this franchise to a family member?
- What areas does your franchise need to improve on?
Some of these questions may be difficult to ask, but you need to know the answers. Investing in a franchise is a significant financial and time commitment, and you should be confident that you have found the right opportunity.
Never invest in a franchise in a crowded sector just because it is currently popular. You need to join a brand that aligns with your skills and goals. While it may take additional time to conduct thorough due diligence on a franchise in a popular sector, the insights you gain will be invaluable.