Is joining a big franchise system, like Subway’s or Domino’s Pizza, better than joining an emerging franchise concept? Does it make a difference to your ultimate success as a franchisee? While there’s no hard and fast rules, there are certainly benefits to both.
With an established brand like Domino’s Pizza for example, you have almost guaranteed success and a far lower risk profile. They have superb support teams, practically bullet-proof systems and a global network of franchisees who can validate the concept.
On the other hand, with an emerging concept, you can snap up prime locations, you tend to have a better relationship and more flexibility with the franchisor, the room to grow with the brand is unlimited and, in many cases, you are able to access much greater levels of opportunity, such as multi-unit and area developer rights.
The truth is, many of the big-name franchisors are no longer accessible to everyday franchise prospects anyway. These brands have saturated markets and are generally looking for new franchisees who have both capital and substantial operating experience working in similar type businesses, if not the same business and who are willing to dedicate ten to twenty years developing their franchises.
The simplest solution for the franchisor is to award new territories to existing franchisees, as they are ‘known entities’ and have already proven credibility.
The Best Time To Join A Franchise
Often, the best time to get into a franchise system is typically when the franchise has between fifty and two-hundred franchisees. This shows that the franchise has a level of validation; if fifty existing franchises are performing well then, the franchisor has done something right, but provides enough room for you to grow as the franchisor continues to grow. When you get the timing right, it usually opens you to opportunity that you may not get with older, more established franchisors.
An example of this is if you joined a franchise brand when it had fifty franchisees. As the franchisor continues to grow, they may give you the opportunity to open more locations, spearhead new initiatives and represent the franchisor on a paid basis.
Opening multi-locations can be particularly lucrative – imagine if you were one of the early Starbucks franchisees? You would probably be selling your business for seven to eight figures now.
When looking at franchise brands with fewer than fifty units you should remain more cautious and conduct extra research. Franchisors with fewer than fifty franchisees typically have less established vendor relationships, less established training and support systems and less experience launching new businesses successfully.