A: If you’re thinking of buying a franchise, there’s no shortage of options in Canada. In fact, there are so many opportunities that it can be difficult to choose. The best way to compare and rate the various franchises that might appeal to you is to use a check list in order to create a level playing field.
In business marketing, there are three terms we use frequently. They’re called the three P’s: price, product, and placement. These can also be used to help in choosing a franchise.
Let’s go over how you can use the three P’s in your franchise search:
1. Price
This can be broken into two sections. First the “price” or cost to purchase the franchise. Every franchise system has a franchise fee—an initial investment that a new franchisee must pay to obtain the franchise. Over and above the initial fee are royalties that are paid monthly to the franchisor based on your sales. You must also budget for construction, equipment, inventory, staff, marketing, etc. Depending on the type and size of franchise you buy, these costs will vary, but you’ll need to budget for them ahead of time.
2. Product
The other “price” you should consider is the cost of the product or service you’ll be selling to the public. This leads us to your product. How many people will it appeal to? Will you have repeat customers or are you selling a one-off product or service? Will it appeal to the masses or only a select few? Is this product or service new, innovative, or trendy, or is it something that’s been around for a long time and has a history in the marketplace?
3. Placement
In franchising, the marketplace is also the territory you’ll be given as a franchisee. It could be as small as a few city blocks or as large as a whole city or even a province. Each franchise system will have or should have a plan to ensure that each franchisee has enough of a “territory” to generate the required number of customers to sustain a viable business. Typically, you’ll have competition from other franchises or businesses that sell the same or similar products and services, but you shouldn’t have to compete with another franchisee from your own system for the same piece of the pie. Make sure you know how the territories are decided and divided.
Price, product, and place are the three P’s of marketing that also apply to buying a franchise. However, there are three more I also recommend looking at:
1. Personality
Just like people, every brand has a personality. Think of some well-known brands and what personality traits come to mind. Take Disney for instance: you probably associate them with fun, family, and entertainment. Another might be State Farm Insurance: reliable, trustworthy, and steadfast. If you’re a quiet, reserved person who enjoys spreadsheets over dancing, then you might not want to be part of a franchise system that requires you to wear a clown suit and greet each customer at the door with a balloon and song.
2. People
They are a tremendously important part of any franchise system. As a franchisee, you’ll be working closely with many people at the franchise head office. You’ll probably be working with people in operations, marketing, and possibly real estate and sales. In the process of choosing your franchise, try to get a feel for how things are run at head office and the people who work there. Are they helpful, knowledgeable, and accessible? Will you get the support you need, or will you be “on your own” once you get going? Being part of a franchise system should mean you’re in business for yourself, but not by yourself.
3. Passion
Lastly, but probably one of the most important P’s in choosing a franchise is passion. Is this a business that you can see yourself working at day in and day out for years, or even decades to come? Is it a business that excites you, that you’ll look forward to growing and developing? Is it a business that you’ll gladly invest in financially, physically, and emotionally?
I recommend looking at all six of the P’s when buying a franchise, whether it’s your first or your fifth. Buying a franchise is a big commitment, but one that will pay dividends if you make the right decision for you. Not every franchise system is suited for every person, so make sure that the system is the right fit for you, your lifestyle, and your goals. Don’t be afraid to take a long, hard look at everything each system has to offer. Price, product, place, personality, people, and passion—all these traits are important aspects of any franchise system and any decision you make. With the right fit and the right franchise for you, the opportunities and rewards are far more easily attained. So do your homework and choose wisely. The right franchise is waiting for you.
Patti Hone
President
As You Like It Marketing
phone@asyoulikeitmarketing.com