What sets your franchise brand apart?
Key Takeaways:
Knowing what differentiates your franchise offering is critical for your brand’s growth and success.
By building brand assets and avoiding duplication, franchisors can increase their offering’s marketability and value to prospective franchisees.
Determining your brand’s opportunity profile can help identify the unique advantages it offers prospective franchisees.
If there’s one question every franchisor should be able to answer about their business, it’s this: What sets your franchise offering apart from its competitors?
Because the franchise industry is highly competitive, it’s critical to understand what differentiates your brand from other similar offerings. Whether it provides franchisees with excellent financial returns, distinctive lifestyle opportunities, or a fun internal culture that can’t be found anywhere else, knowing what makes your brand stand out – and understanding how to leverage those assets in your franchise sales process – is critical for your franchise system’s growth.
In this article, we’ll explain the steps to differentiate your franchise offering and explore strategies to get your brand out of a rut and back on the road to long-term success.
Why Brand Differentiation is Important
As a franchisor, selling franchises is a critical part of growing and scaling your business. Differentiating your franchise offering from its competitors is an important part of that process, positioning you to attract qualified, good-fit franchisee candidates who can benefit from the unique advantages and opportunities that set your offering apart in the marketplace.
Despite its significance to the franchise sales process, brand differentiation is often overlooked by new and emerging franchisors who are focused on networking, attending conferences and investing in paid media advertising to recruit franchisee candidates. Without the right strategy in place to differentiate their offering from competitors, though, emerging franchisors can sometimes find themselves stuck with low traction, stagnant franchise sales and a disappointing return on investment.
Because of that, it’s important to identify the unique opportunities your franchise offering can provide franchisees – and to use those “uniques” to develop a strategy that convinces prospective buyers to choose your brand over its competitors.
What is a Franchise Opportunity Profile?
A franchise opportunity profile is a business profile that identifies the economic benefits and opportunities a franchise offering provides to its franchisees. As a franchisor, you can use your franchise opportunity profile to develop a marketing and franchise sales strategy that emphasizes your offering’s economic advantages to elevate it above competitors.
How to Develop a Franchise Opportunity Profile
To develop your franchise opportunity profile, start by evaluating your franchise offering’s finances and key performance indicators with a goal of understanding the specific economic benefits your brand offers franchisees.
When evaluating your offering, consider a prospective franchisee’s ROI potential for the following aspects of your business:
Fee structure. What are your offering’s initial fees? How much capital reserve should franchisees have on hand? What is your royalty structure like?
Lifestyle. What lifestyle benefits does your offering provide to franchisees? Do franchisees need to be present at brick-and-mortar locations during business hours, or can they work remotely on their own schedules?
Supplemental income. Does your offering provide the opportunity to work on a flexible schedule while earning a part-time supplemental income?
Income replacement. Does your brand generate enough revenue to provide a full-time income that allows franchisees to leave their corporate jobs?
Legacy building. Does your offering provide franchisees with opportunities for legacy-building and generational wealth?
By locking down your franchise opportunity profile and getting specific about the economic benefits your brand can offer prospective franchisees, you can start to develop a marketing and recruiting strategy that targets qualified candidates whose goals are aligned with your franchise opportunity profile.
To learn more about differentiating and growing your new franchise offering, check out our GoodSpark franchise growth accelerator program.
Strategies for Differentiating Your Franchise Brand
It’s important to take a holistic approach to identifying your brand’s assets when differentiating your franchise offering. Make sure to consider the benefits your brand offers franchisees not only in terms of finances but also lifestyle, mission, values, leadership, vision and more. Don’t be afraid to communicate your brand’s identity authentically – because that’s what will attract the right franchisee candidates to your offering.
Franchise Disclosure Document (FDD)
As a franchisor, your FDD is more than just an important legal document. It’s also a sales tool that can help communicate the value of your franchise system to prospective buyers. When working with a seasoned franchise attorney to develop your FDD, remember that the following disclosure items can be used to tell a compelling economic story about your franchise offering:
Item 7 of the FDD discloses the estimated initial investment that prospective franchisees can expect to buy and open a franchise business. How does it differ from competitors, and what is the ROI potential for that investment?
Item 19 of the FDD communicates the financial performance representations of your franchise offering. What are your offering’s unit economics? Do your numbers show a strong financial position compared to other offerings in your market?
Which KPIs can distinguish your offering from others in your industry?
By demonstrating strong financial performance and data, prospective franchisees will be able to understand the potential ROI of buying a franchise business.
Initial Franchise Fee Structure
In addition to your offering’s financial performance history, remember to include economic benefits offered to franchisees in terms of initial fees and investments, territory structures and ROI potential.
Fee structure. How do your offering’s franchise fees benefit the franchisee’s business? Is your estimated initial investment lower or higher than competitors? What kind of support do you provide to new franchisees?
Territory structure. Does your territory structure offer different benefits than other brands? Do you offer franchisees the potential for expansion or multi-unit ownership to scale their business?
ROI potential. What can franchisees expect to get back from their investment? Do you offer incentives or benefits for high-performing franchisees? Do you offer ongoing business support?
By communicating the factors that distinguish your brand from others in terms of fees and ROI potential, prospective franchise buyers can get a clearer understanding of why they should choose your offering over its competitors.
Marketing and Media
People are drawn to people – even when it comes to buying franchise businesses. Because of that, it’s important to remember the human elements of your franchise offering when differentiating it from other brands.
Website. Is your website aligned with your franchise opportunity profile? Are its contents and videos original and targeted to your ideal franchisee?
Brand story. Do you have a compelling brand story? What sets it apart from your competitors?
Mission, culture and leadership. Does your offering have a specific social mission that makes it different from other businesses? What distinguishes your culture and leadership from your competitors?
Marketing and recruiting. How do you market your franchise offering? Are your marketing materials aligned with your franchise opportunity profile? What makes your discovery process unique?
Digital media. How do you use digital media to communicate your brand’s differentiators? How is it different from similar brands in the same space?
By finding ways to communicate the human side of your brand to the right people, you can increase the odds of attracting franchisee candidates whose goals, values and philosophies align with your brand.
Franchise Sales Organizations
Although it’s unlikely that you’ll work with a franchise sales organization when you’re brand new to franchising, taking the time to evaluate and differentiate your offering early in the game can increase your chances of working with one after you’ve established good brand positioning, strong capital and a track record of success.
Leveraging Your Brand's Authenticity
When your goal as a new franchisor is to sell franchises, it can be tempting to duplicate what other brands have done before, in hopes of replicating their success. However, imitative growth strategies often fall short and can leave franchisors feeling stuck and discouraged.
Because of that, it’s best to avoid using templates and generic language to market your franchise offering to prospective buyers. Instead, consider developing a custom marketing and recruiting plan that is tailored to your ideal franchisee and clearly communicates your franchise offering’s advantages and assets.
By differentiating your franchise offering and blazing your own trail as a franchisor, you can attract the right franchisee candidates while establishing a solid foundation for your business from the start.
If you’re a new or emerging franchisor who’s interested in differentiating your offering from competitors, our team of franchising experts can help. Contact us today.
