FRANCHISE BUYERS SHOP AROUND, SURVEY SHOWS
A survey has shown that franchise buyers often end up choosing a business in a completely different industry from the one they first started investigating. Could the business that suits you be different from the business you think you want?
When you start looking for a business, you might have a very clear picture of the type of business it will be. It could be a bustling café at the heart of community life, an upmarket shoe shop or something that gets you out and about. That may be the dream, but it could pay you not to be too single-minded when you start your search. A recent survey in the US suggests that a significant proportion of franchisees will end up investing in a different category of franchise from the one they first considered. One consultant, John Fogleman, claims on LinkedIn that this applies to some 70 percent of potential franchisees.
The survey, which covered the top 25 search categories, has been turned into a fascinating infographic by Mike Latham of Mike Agency in Denver, Colorado, who specialises in applying technology to the sales and marketing process. Mike took a study of over 200 franchisees that showed their initial search intent compared with the franchise in which they actually ended up investing. It might be only a small sample but the survey showed that the average franchisee considered 8.6 different categories before investing and that, in many cases, they would end up buying into a completely category from the one they first considered.
The results suggest that while some categories maintain their initial appeal, others may have to work harder to compete. Looking at Distributorships & Vending, for example, around two-thirds of the people who bought franchises in this category included it in their initial search. In Medical/Elder Care, by contrast, some 60 percent of those who ended up buying a franchise in this category did not include it in their initial search.
For franchise buyers, the survey also reinforces the point that industry category is only one of several factors that you have to take into account when choosing a business. Yes, it’s important to select a category you will enjoy, but it’s more important to find an opportunity that really meets all your needs: investment level; payback period; hours; skills; family involvement; and so on. Here’s a helpful guide to how to evaluate the possible opportunities.
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