The abundance of franchise rankings available in the industry can be a
bit overwhelming. This is especially true for someone trying to use this
information to help make the life-changing decision of deciding which
franchise to invest in.
So far this month, franchise rankings have been released by
Franchise Times and
Franchise Business Review. Last week Entrepreneur Magazine released its
39th annual “Franchise 500,” where
Sport Clips Haircuts is honored to be ranked in the top ten for the second consecutive year.
Many other industry publications and websites will also release their own
rankings in the coming weeks. With so much information available, some
of it even contradictory, it can be confusing for a franchise candidate
to determine which of the top-ranked brands to pursue.
Each ranking will describe its selection criteria, and it is important
for the discerning franchise candidate to pay close attention to what
those are and how the information is gathered. Also, take in to account
any type of latent bias that may play a factor in the ranking.
With that in mind, any one of these lists provides a great place for a
franchise candidate to start when evaluating which opportunity might be
best. From there, they can move on to a much larger and more in depth
due diligence process.
So how does the franchise candidate decipher this, sometimes incongruous
information and use it to your advantage?
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Understand the criteria involved in each ranking. Factors will include
costs, fees, growth rates, network size,
continuity rates, brand strength and stability. What is most important to you, and how
is this weighted?
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Look for consistency. It’s great to be named the top brand in a ranking,
but which brands consistently appear near the top of the list? Last year
we took this exercise to the extreme and created a
consolidated ranking to end all rankings.
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Create your own ranking of the factors that are most important to you.
That list may include culture, core values, level of support, or your
own personal
lifestyle and financial goals just to give a few examples. Take the time to understand how each brand’s
offering contributes to those ideas. Quickly eliminate those that don’t
fit. For example, if flexibility and scalability are priorities, an owner-operated
model probably isn’t going to work.
In short, it is important to understand a life-changing decision like investing
in a franchise will and should take a considerable amount of time and
energy. Take your time to compare the offerings of the brands that scored
highest on your lifestyle and financial goal ranking, and discuss the
information you gather with those who are close to you. At the end of
the day, those are the opinions that matter most.
For more information on the Sport Clips offering,
click here.
