Let's Chat About Franchising!
This last weekend, we had the opportunity to attend the International Franchise Expo 2018 in New York, NY as a partner of Confimprese, the leading Italian retail association, made up of modern companies with franchising and direct networks. One of the largest franchising expos in the world, prospective franchisees travel far and wide to attend IFE and explore the industry’s hottest concepts and opportunities.
As a consulting firm specialized in the food and beverage industry, VentiQuattro believes that franchising, when done correctly, is a great expansion tool, and will help your business grow exponentially.
For those unfamiliar with it, franchising is an important model for businesses to consider. It helps capture market share, create brand awareness, improve visibility, and enhance customer experience, making it an especially good option for brands that are already established in a certain area.
With a rapidly moving economy to fuel it, the franchise industry is set to grow for the eighth year in a row. For 2018, franchising establishments are projected to grow by 1.9% to over 750,000 different locations, compared to 1.6% growth in 2017.
However, for brands transitioning from foreign countries into the U.S., there are a couple things to consider before franchising. First, it is important for businesses to consider how strong their customer experience is. Customers are the key! If the customers aren’t happy then the business won’t be happy. It’s important to compare one’s customer experience to its competitors to make sure they are equal or stronger than the competition. Second, businesses must consider the economics of a specific location (city, state, etc.) before beginning the franchise journey in the United States. The concept that works best in one country (say, Italy), will not always be the most successful strategy elsewhere. It’s crucial to do the math and the necessary research before entering the U.S. market.
In most circumstances, unless you have a proven concept that you’re confident will satisfy the requirements of beginning a franchise in the U.S., we recommend adopting a different strategy. For foreign businesses that are under-developed in the United States, but want to gain more brand awareness, we have two recommendations: going into a direct store or doing a joint venture with a local partner.
So, before you consider franchising your business, remember to do your research! Make sure that your product will transition well into a new market, that your customer experience is strong against your competitors, and do your math! If you end up having the right numbers, location, funds and partner, then go franchise!