How to Develop Your GoodFit Franchise Opportunity Profile
In the franchise industry, everyone is on a mission to achieve something great through their business ventures.
For many franchise buyers, that mission is especially focused on improving their lives and financial situations by finding the right economic opportunities to support their goals. Too often, though, new and emerging franchisors fail to clearly define their brand’s economic opportunity profile before offering a franchise to prospective buyers – a mistake that can lead to lost deals, missed opportunities and slumps in franchise sales that can make it feel like franchising just isn’t working for them.
So how can franchisors avoid those mistakes and ensure they’re communicating all the opportunities their brand has to offer? In this article, we’ll explore strategies for evaluating and defining your franchise offering’s opportunity profile – and attracting the right franchisees to grow your brand.
What is a Franchise Opportunity Profile?
A franchise opportunity profile is the unique combination of opportunities that a franchise offering can provide to franchise buyers to support their personal and financial goals.
Franchise opportunity profiles are important tools for streamlining the franchise sales process, attracting GoodFit franchisees and creating opportunities for franchise sales while avoiding lost deals and false starts with candidates that aren’t the right fit for your brand.
How to Evaluate Your GoofFit Franchise Opportunity Profile
As a franchisor, attracting franchise buyers whose goals, values and capitalization align with your franchise offering is critical. To effectively communicate the value of your franchise offering and attract candidates that are a good fit for your brand during the franchise sales process, it’s important to determine your franchise system’s opportunity category, unit economics and other differentiating qualities that can set it apart from competitors.
1. Determine your franchise opportunity category
Every franchise offering falls into at least one of four opportunity categories, each offering specific opportunities for franchise buyers depending on their personal and economic goals. These categories include:
Supplemental income. These franchise opportunities often appeal to buyers who are looking for a way to generate additional income through entrepreneurship. These offerings usually have lower startup and operating costs but sometimes have a lower ROI potential.
Lifestyle. Franchise buyers who are looking for more flexibility and time for family, friends and other obligations are often drawn to the opportunity provided by lifestyle franchise offerings.
Income replacement. Franchise buyers who are looking to replace their existing income and transition into a new industry or career often benefit from the opportunities provided by income replacement franchise offerings.
Legacy-building. For franchise buyers hoping to build a legacy and pass down a brick-and-mortar business to future generations, the opportunities provided by legacy-building franchises are often appealing. These franchise offerings often require a higher initial investment, but usually also have a higher ROI potential.
As a franchisor, knowing which opportunity category (or categories) your franchise offering belongs under can offer a clearer picture of who your target demographic is – and help you understand how to shape your marketing strategies to reach them more effectively.
2. Know your franchise system's unit economics
Too often, startup and emerging franchisors make generic statements about the economic potential of owning a franchise business – a mistake that can lead to confusion among prospective buyers as well as lost deals and missed opportunities.
To ensure prospective franchise buyers have realistic expectations when evaluating your franchise opportunity, consider asking the following questions when evaluating your GoodFit Franchise Opportunity Profile:
What is the estimated initial investment?
How are your existing franchisees performing at the unit level?
Is the franchise business scalable?
What is the ROI potential of owning the franchise business?
By taking the time to understand your franchise system’s unit economics and sharing those numbers accurately with prospective buyers, you can establish credibility and help candidates set realistic expectations before investing in your brand.
3. Be straightforward about the return on investment
Discussions about ROI potential are often overlooked during the franchise sales process – a mistake that can lead to unrealistic expectations and lost sales opportunities. To ensure franchisees are well informed about the ROI opportunities associated with buying a franchise business, consider the following when developing your franchise opportunity profile:
Be specific. Avoid generic statements about the franchise system’s unit economics. Instead, offer real examples of franchisees’ financial performance at the unit level.
Be honest. Own your offering’s opportunity profile and don’t try to make it look like something it’s not.
Be realistic. Being upfront about your brand’s opportunity profile can help attract franchisee candidates who are looking for what you’re offering.
By addressing the economic opportunity that your franchise offering provides, prospective buyers can get a clear idea of what to expect as a franchisee – set realistic expectations about their investment.
How to Align Your Franchise Sales Process with Your Opportunity Profile
Marketing plays an important, but often under-acknowledged, role in the franchise sales process. Because of that, making sure your marketing materials – including your franchise sales website, brochures, social media and other assets – convey a clear, accurate picture of your offering’s franchise opportunity profile is critical.
1. Competitively position your marketing materials
To reach your brand’s target franchisee candidates, your marketing materials should be competitively positioned and differentiated from competitors within both your industry and initial investment range.
To ensure that your franchise opportunity profile is the prism through which all of your marketing communications are conveyed, consider asking yourself the following questions when developing your marketing copy:
Are you connecting with candidates? Does your website tell a compelling brand story? Does the prospective buyer know who you are and what you’re offering?
Is the franchise opportunity profile clear? Your offering’s opportunity profile should be clear and consistent. Its opportunity category should be obvious, and prospective buyers should readily understand whether the franchise offering will support their personal and economic goals.
Does this build credibility? By providing specific details about the franchise system’s unit economics, level of support for franchisees, startup costs and expenses, you can build trust with franchise brokers and prospective buyers.
Am I being specific enough? Generic information and sweeping generalizations about supporting franchisees aren’t enough. Instead, get specific about how the franchise offering provides opportunities and supports franchisees in improving their lives and futures.
By making sure your marketing materials communicate your franchise opportunity profile, you can build trust with prospective buyers and brokers while making sure you’re attracting candidates who will be a good fit for your franchise system.
2. Tell your economic story
Your brand’s economic performance plays a key role in your franchise opportunity profile. Because prospective franchise buyers and brokers should have a clear picture of a franchise offering’s economic opportunity potential, sharing your economic story is a great way to help prospective buyers understand its value.
Because franchisors should be careful about making specific statements related to finances and investments, it can be a good idea to seek the advice of an experienced franchise attorney when developing your FDD and finance-related marketing materials. However, some general ideas to consider including on your sales website to make your franchise offering’s economic opportunities clearer might include:
ROI potential. How can the offering help franchisees achieve their personal and financial goals?
Scalability. Are there opportunities for multi-unit or multi-territory growth? Can the business be handed down to future generations?
Validation. How are existing franchisees performing, and what do their numbers look like at the unit level?
In addition to addressing the points above, making sure your Franchise Disclosure Document (FDD) is positioned competitively and conveys detailed information about your franchise offering is important for communicating its opportunity profile to prospective buyers. This is especially true of the following disclosure items.
Item 7
Item Seven of the FDD discloses the types of expenditures franchise buyers should expect when opening and operating their franchise business, as well as the payment amounts and due dates. Addressing these numbers can help prospective franchise buyers get a clearer picture of their financial obligations before investing in a business – something that can help set the right candidates apart during the sales process.
Item 19
While optional for franchisors, Item 19 of the FDD includes critical information about the financial positioning and can be an excellent tool for attracting and retaining qualified franchise buyers.
The financial data disclosed in Item 19 can help prospective buyers understand whether their goals are aligned with the franchise offering’s opportunity profile by answering important questions including, but not limited to, the following:
Whether the opportunity category can support their future goals
Whether the offering’s unit economics are compelling enough to invest in
What revenues and profit margins they can expect as franchisees
The gross revenue of the corporate location
How the franchise opportunity can transform their lives
Even if you think your franchise sales process has fallen short in the past, or your marketing materials aren’t detailed enough, there’s still time to turn things around. By developing a GoodFit Franchise Opportunity Profile, you can increase your chances of attracting the right franchisees who are as prepared for success as you are – and get your brand on track for long-term success.
Are you ready to develop your GoodFit Franchise Opportunity Profile and kickstart your sales process? We’re here to help. Contact us today!
