Generally, when those interested in purchasing a franchise begin to do research, they start with well-established brands like McDonalds, Burger King, Subway, etc. because, it is commonly believed that the longer a franchise has been around, the less chance of their business failing. However, this isn’t always the case. There are many reasons why joining an emerging franchise may be more to your benefit and aid in your business finding great success. Because of this you may want to alter your franchise search from “most successful franchises” or “most established franchises” to something like “best new franchises”.
The belief that, the older a franchise is, the less chance of their business failing, is a common misconception. Here are just two examples of very well know franchise systems that saw significant decline due to market changes:
- Sbarro – This well-known pizza franchise was open for over 60 years before it had to file for bankruptcy in 2014 on its second location within 3 years. Following these bankruptcies, Sbarro announced their plans to also close 192 more of its 800 units.
- RadioShack – This electronics store had 4,000 company-owned and franchise units in 2014, and now, in 2017, has less than 100.
Generally speaking, if the misconception that older franchises had less chances of failure were true, well-established franchises like Sbarro and RadioShack, with years of experience, would not have seen such a downturn. If you decided to purchase a Sbarro location based on the idea that 60+ years of establishment meant that your business would not fail, you may have been extremely disappointed to find that your store was one of the 192 that closed.
Other than addressing the decreased chance of failure misconception, there are several other reasons why joining an emerging franchise may be a better investment than joining a well-established franchise:
- Expansion opportunity
- Seeing the growth
- More opportunities for customization
- Being a veteran
- Lower on-boarding costs
- Better suited for current market
- Expansion opportunity: Emerging franchises often already have territories mapped out that do not yet have a franchise location in them. Investing in a franchise early allows for you to have first “dibs” on other mapped out surrounding territories, should you wish to expand. Once the territories are taken, you will not have this opportunity.
- Seeing the growth: As a new franchisee in an emerging franchise brand, you are an integral part of the growth phase. You play a large role in the growth of the entire system, and you will not just see your individual location grow, but also the entire franchise network.
- More opportunities for customization: Since you have joined the franchise system at its early stages, there are likely still some business systems that are being perfected or added to. Franchisors will seek advice and look for solutions during this time, which you as the franchisee can be a part of. Your ideas and successes can turn into “corporate” business practices written into the system. This helps the reward of growth to feel stronger, and for you to feel like you are truly playing a crucial part in your franchise system.
- Being a veteran: As the franchise continues to multiply and grow, you will always remain one of the veteran franchisees. This means others will look to you as the captain and their mentor as they begin their new franchise. You will always feel comfortable with the franchisors and the franchisees you knew from the beginning and have a lasting bond and business relationship with them. Additionally, you can play a huge role in helping to shape newer franchisees in the future.
- Lower on-boarding costs: Typically, with an emerging franchise, the on-boarding costs are lower to promote interest. As the franchise begins to grow to upwards of several hundreds of franchises, the initial investment and on-boarding costs may increase. Joining in the earlier stages allows you to buy cheaper creating the potential to make a greater profit as growth continues in the future.
- Better suited for current market: It’s no secret that the current century is highly dependent on technology and understands that things are continually changing and becoming more digitalized and robotized. Franchises with systems created 60+ years ago, may not be equipped to meet the present and ever-changing industry and market. Whereas, a system that was created and adapted during the time of present technology, understands what it means to adapt, and how to do it. Meaning that the business system has essentially future-proofed itself. When the market changes again and new technologies arise, they will already know how to adapt to keep up with it, and thus, continue to thrive.
If you are interested in purchasing a franchise or have already begun your search, you may want to seriously consider joining an emerging franchise brand. By joining early, you can truly reap many benefits and see great growth and success. If you’re searching for “the most established franchises”, backspace now, and instead, search for “best new franchises” and check out The Brothers that just do Gutters. A Brothers Gutters franchise is the perfect emerging franchise for you. But don’t take our word for it, just ask our existing franchisees! Contact our Head of Franchise Sales today, Ken, for more information on our franchise opportunities!