Buying into a franchise opportunity puts you in charge of your own business while offering the benefit of a proven system to increase your chances of success. But you can increase your chances further by finding a system that stands out from the rest. At PGP, we rely on a combined 50+ years of industry experience to identify the franchise brands most likely to succeed on the market. Here’s what we look for:
Strong Unit Economics
While this may seem almost too obvious to mention, unit-level numbers are arguably the most crucial factor to consider when deciding on a franchise opportunity to invest in, and we’d be remiss not to include it on this list. A franchise shows promise when its Franchise Disclosure Document (FDD) demonstrates a strong return on investment – which often looks like a lower buy-in cost and a higher average unit volume.
Look to a brand like Jeremiah’s Italian Ice for a good example of operational excellence. From the number of employees they need to run daily operations, to how quickly single-unit operators have been able to turn a profit, to their pint-sized building footprint, Jeremiah’s economic blueprint makes their franchise opportunity one of the coolest on the market.
Differentiated from its Industry
Whether by creating the latest and greatest version of a type of product, offering a higher level of customer service, integrating new technologies and inventive ways for consumers to interact with the business – a franchise that’s worth the investment must be finding ways to innovate. If the concept doesn’t have the “it” factor that distinguishes it from the competition, it will get beat out.
A franchise like Vitality Bowls has done an incredible job of creating its own advantage over its competitors. Because it was developed out of necessity – its founders needed a place where their food-sensitive daughter could eat the world’s most nutritious foods without risking a severe allergic reaction – Vitality Bowls operates as a leader in its category and has taken calculated risks to stay ahead, like becoming one of the country’s largest importers of the coveted açaí berry. Plus, they never use fillers like ice or sugar in their products, which makes them the clear choice for health-focused consumers every time.
If we could predict industry growth or decline with 100% accuracy, investments would be completely risk-free. There’s no sure way to know whether a brand has the power to perform on the market in the long term, or slip seamlessly into the collective cultural consciousness. But some of the variables you examine can help you feel more confident in your brand investment.
How long has the industry existed? How long has the brand existed? How well have the brand and the industry performed during economic downturns? How has the coming of age of millennial consumers affected brand and industry growth?
Look to a brand like Conrad’s Grill to know what real staying power looks like. Their feel-good grilled wraps cater perfectly to a massive all-day audience of bar-goers, early risers and night owls, and the brand’s undeniable sense of cool keep customers consistently lining up out the door.
Brand growth doesn’t just happen on its own. It takes a community of people, from bottom to top, working toward the same set of visible, tangible goals. Look at a franchise like Balance Grille, whose corporate team of driven millennial entrepreneurs has worked to align the interests of everyone in the system – from in-store employees and managers to owners, operators and corporate staff. Their focus on technology-driven communication and accountability helps ensure everyone is working toward the same unified goal. When all the players are united in making every aspect of the brand run as efficiently and effectively as possible, growth will come.