A recent article in the Franchise Times discusses the success of an emerging franchise system. In part, the article attributes the system’s success to having an “on-trend brand.” But, making a long-term investment in a franchise based on a trend isn’t necessarily the best decision—as trends can fade long before franchise agreements expire. With that said, if a trend is here to stay, then buying in could prove to be a smart investment. So, how do you decide? Here are some insights from franchisee lawyer Jeffrey M. Goldstein:
Is the Trend Local?
One important consideration is whether the trend is relevant to the geographic area in which you are planning to open a franchise. For example, the Franchise Times article focuses on the relevance of BurgerFi’s “on-trend brand” in Saudi Arabia. Specifically, the article notes the system’s use of “beef that is free of hormones, steroids, antibiotics or other additives,” and emphasizes that, “[t]he quality of its products will resonate with Saudi consumers.”
While these are all characteristics that might make for a successful burger franchise in various regions of the U.S., different markets require different analyses. Just because a brand is “on-trend” in one area doesn’t necessarily mean that it will be “on-trend” in another.
Does the Trend Have Staying Power?
Buying a franchise is a long-term investment, but trends come and go. Even if a franchise finds success in its early years due to piggybacking off of a trend, this does not necessarily mean that the franchise will be profitable long-term.
How Competitive is the Market?
Another important factor to consider is market competition. If one company is seeking to franchise in order to profit off of a trend, it almost certainly isn’t alone. Even with trends, there is a point of market saturation. If too many local retailers are offering the same product or service, you may find it difficult to stand out from the crowd.
What is the Strength of the Franchise System?
Is the franchise system well-established? Or, was it set up or modeled specifically for the purpose of targeting a trend? When buying a franchise, the strength of the franchise system is important, as you will need much more than just an “on-trend brand” to be successful.
Are You Passionate About the Franchise?
Finally, when buying a franchise, it is important to be passionate about the business. Are you buying the business because you think it has a chance to ride the wave of a recent trend? Or, are you buying it because you believe in the product or service and are willing to do what it takes to make sure your franchise succeeds?
Get Your Franchise Opportunity Reviewed by National Franchisee Lawyer Jeffrey M. Goldstein
These are just a small sampling of the numerous considerations that go into deciding whether to pursue a particular franchise opportunity. If you are thinking about buying a franchise, we encourage you to contact us to learn more. For a free, no-obligation consultation with national franchisee lawyer Jeffrey M. Goldstein, call 202-293-3947 or request an appointment online now.