Why You Shouldn’t Overlook Emerging Franchise Brands

Jun 20, 2022 | Articles, Blog, Blogs

Every entrepreneur is familiar with the phrase, “…getting in on the ground floor.” But what does that mean in the world of franchising? Welcome to a sector of brands and concepts known as emerging franchise brands. Emerging brands typically meet one or both of the following classifications: the franchise brand 1) has been in business less than five years, 2) has fewer than 10-50 units awarded. Industry research reveals that as many as 80% of all franchise concepts have less than 100 units, and approximately 300 or so new brands debut each year.

In this FranNet blog, we’re going to discuss the benefits of these early-stage players – and why you shouldn’t overlook emerging franchise brands.

The Foundation of Success

Even legacy franchise concepts that have become industry standard bearers such as Taco Bell and 7-Eleven had to start somewhere. And statistically speaking, there’s got to be an emerging brand out there today that’s destined to top the 100-locations milestone and go on to become the next legacy brand. That’s what getting in on the ground floor truly means.

Negotiating Advantage? Franchisee

Early stage franchisors must proliferate to become successful. This often leaves an emerging brand in a somewhat vulnerable position – which you can play to your advantage in any negotiations. When you’re engaged in discussions, you may have ample opportunities to dictate better terms as it pertains to the franchise fee, royalty payments, and perhaps most important of all – your territory. If you’re interested in a multi-unit play, you can go even higher and inquire about becoming a master franchisee for an area much bigger than the standard operating territory. It won’t always be the case, but emerging brands could offer you the opportunity to negotiate some favorable terms for yourself as a franchisee in their system.

A Big Fish in a Small Pond

The big fish in a small pond description may wind up being an apt metaphor if you choose to franchise with an emerging brand. As one of the brand’s initial franchisees, you should have an opinion that truly counts for decisions, input, and the overall direction of the franchisor’s expansion plans. Early franchise candidates may even serve as test-cases for their training program and ongoing support – a situation that should offer much more personal attention that you’d likely get from an established or legacy franchise brand.

If you do decide to investigate a franchisor that meets the definition of an emerging brand, it’s even more important to conduct the right amount of due diligence. Read up on the leadership tasked with growing the concept and pay extra attention to the brand’s financials. You should be looking for the franchisor to demonstrate transparency in who they are, how they intend to grow, and what role franchisees will play in their development plans.

Should you decide to investigate a ground floor franchise opportunity, FranNet can introduce you to multiple emerging brands. We can help you get started today by setting up a no-cost, no-obligation appointment with one of our qualified FranNet representatives. It’s all really simple – you just need to reach out and talk with one of our franchise experts today! Together, we can find a franchise ownership opportunity that matches up perfectly with your lifestyle and income-oriented goals.