Franchise Store

Most small businesses in a community are afraid that a franchiser may sell a franchise in their territory or their trading area. In actuality, this is a real concern and it is a real fear. Indeed, they should worry about it.

Why you ask? It's simple, because even if you've had a business in the community for over 30 years, the franchiser has thousands of outlets, a very strong brand name, and probably a superior business model, which is more efficient, along with better marketing.

This means they get more bang for their buck, and can operate at lower costs, and decimate your business and easily win a price war.

This does not mean you cannot beat out a franchised outlet if one is established in your area, only that it's going to be a lot harder than you think, and it's not something you should take for granted. I'd like to give some advice to you, if you are not too arrogant to listen.

First off, before retirement I ran a franchising company and we franchised 187 franchisees in 23 states serving about 450 cities in four countries. Our business model was superior in absolutely every way.

We put 380 companies out of business in the local markets that we entered. Yes, most of these were mom-and-pop type businesses, many very well-established and anchored in their communities. They could not compete with us because we were a superior species. They had not a prayer.

However, I can't recall competing with a few companies that sure gave us a run for our money. Had I not been so darn competitive, they would easily taken out our franchisees in the area. Would you like to know the secret to competing with a franchise company? It's pretty simple, but I bet you may never do it because it's hard work.

You must draw a 10 mile radius around your business and a 10 mile radius around the competitor on a map. Next, you must look at where those two circles overlap. This is the target zone or battlefield. Next you need to shade in that area on the map.

Then you have to literally walk to every single resident in that area, give them a coupon, by handing it to them, and ask them very nicely to please do business with you because you are competing with another company which is coming into the area.

Tell them about your long standing service to the community. Explain your nonprofit work, your work in the service clubs, and how you sponsor the local baseball team, high school sports, and have kids, family, and close friends that are also very involved in the community.

You must literally canvas the area, as if you were a new real estate agent, or as if you were working with the Democratic or Republican Party in your area and walking precincts. That is the only way I know to compete with a strong brand name of a large Corporation that moves into your area.

Now, I am not sure how many franchising companies are as aggressive as we were. I doubt they all are, although I have read Ray Kroc's book; "Grinding It out," and some books about Tom Monahan the founder of Domino's Pizza. Both of those franchiser founders were competitive and ruthless in the market place.

You can expect that a good number of franchising companies will compete at that level. I know we did, and we went beyond that. If you're going to compete with a company like the one that I founded, you are going to have to do exactly what I just told you, or they may just take you out.

Please consider this, as the business world is the real world, it's not a fantasy land, it's not a place to play around and play games. If you want to win in business you got to want it, and you've got to go get it, you will not score those touchdowns unless you have your game plan in sync with reality of your customer and in the minds of your consumer. Please consider all this.

Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank. Lance Winslow believes in franchising.

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