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Tuesday 16th August, 2022

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What makes a saleable franchise?

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What makes a saleable franchise?

Some franchise concepts make for particularly attractive propositions to franchisees. Here’s why single-service concepts can work well

Some franchise concepts make for particularly attractive propositions to franchisees. Here’s why single-service concepts can work well

It’s the adage we’ve heard time and time again. Its message is clear: a simple approach often works better than a complex one. I feel the saying, in many cases, rings true for the franchising industry as well. Here’s why.

One of the biggest challenges for franchise brands is differentiation. With more than 3,000 franchisors vying for franchisees, the unique qualities of a particular brand aren’t always obvious. While brands go about differentiating in several ways, it’s safe to say many rely heavily on product and service innovation. I’m here to tell you that might not be your best bet.

Single-service concepts, or brands whose vast majority of revenues come from a single source, present a unique opportunity for differentiation. These concepts focus on one – maybe two – services or products, and execute them better than anyone else.

For our brand, Take 5 Oil Change, 85 per cent of our revenues are generated strictly through oil changes. Instead of relying on additional services to drive consumer interest and sales, we stick to what we know best. This strategy brings brands a laundry list of benefits, both at the franchisee and corporate level. All of which, when leveraged correctly, fuel growth. Here’s how it works.

Make your model more appealing

Franchise growth relies on one thing: an attractive franchise opportunity. For an opportunity to be considered a smart investment, the concept needs to be profitable, ripe for growth and backed by well-funded support, training and marketing functions. Getting to that point may not be an obvious path, but could be simplified through a single-service concept.

There are four key qualities that make a single-service franchise model more appealing:

1. Loyal consumer followings: If you’re selling one thing that you’ve perfected, as opposed to constantly “innovating” to reach new customers, you’ll end up building a loyal, almost “cult-like” following, that values your brand’s reliability. Prospective franchisees want a brand that carries clout with consumers, and a loyal following will get you there.

2. Streamlined franchisee operations: Franchisees have a lot on their plates, so a streamlined franchise model is often more attractive, as it can help them run their business more efficiently. Single-service models can make it easier to source materials and equipment, target local audiences and train employees properly.

3. Efficient location openings: In addition to ongoing operations, single-service models bring a streamlined opening process as the build-out phase, staff training and operating procedures are generally more straight-forward than concepts with dozens of services to offer from day one. And, you know what always goes over well with franchisees? Low ramp-up time.

4. Simplified business model: Streamlined operations coupled with a reputation for reliability firmly in place, can make a single-service concept easier to operate and ensures that it offers a clear consumer proposition – two qualities that score very high with potential prospects.

A well-executed single-service model brings these four characteristics to your franchise opportunity, differentiating your concept in the crowded franchise space.

Save resources, grow your footprint

A huge cost for franchisors is product innovation. In fact, R&D is one of the largest line items on the books for many brands. With a single-service offering, however, those costs can be greatly – if not entirely – reduced. The need to introduce a new service or product offering every quarter? Eliminated. Securing extra budget to market those introductions? No longer a concern. Instead, a single-service model offers a brand the ability to focus and direct resources to other key areas of the business that will ultimately drive franchise development efforts.

One function to prioritize is franchisee support, meaning dedicating funding toward increased operational and training resources for your franchisees. This will not only support them directly at the unit-level (which will drive systemwide performance), but investments put toward your franchisees can make your brand more appealing to prospects, too.

Finally, don’t forget about marketing and advertising. Competition is fierce, and brand visibility is fundamental to success. When executed correctly, marketing and advertising functions can enhance brand visibility, drive consumers in and increase sales. Inevitably, these outcomes will fuel interest in the franchise opportunity, ultimately powering growth. Now that the foundation has been set – with a solid offering and the support functions to back it up – you’re ready to make a commitment to best-in-class franchise development lead generation.

The bottom line

A single-service concept is not always one that only has one offering in the literal sense, but rather a model that features one service or product that strategically overshadows all others. While this approach isn’t necessarily a perfect fit for every franchise business out there, it’s one to consider when strategizing how to grow your franchise brand into new markets, while keeping consumers coming back for more.

ABOUT THE AUTHOR

As a seasoned aftermarket franchise professional and Vice President of Franchise Development at Take 5 Oil Change, Ted Rippey launched the Take 5 franchise initiative in March 2017 and oversees the brand’s ongoing growth. Before joining the Take 5 team, Ted served as the Chief Compliance Officer at Driven Brands, the parent company of Take 5. In that role, he oversaw all franchisee compliance matters. Prior to joining Driven Brands, Ted, along with his father and brother, founded 1-800-Radiator, a wholesale auto parts distribution franchise.

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