The Value of Franchises for Sale With a Strong Brand
Justin McDonell| Master Franchisor | Anytime Fitness
Justin McDonell, Master Franchisor for Anytime Fitness Australia, discusses the value of a strong franchise brand. Justin has seen first-hand the impact of having a stronger brand, as Anytime Fitness has grown from zero to over 170 clubs in under four years. During that short time, Justin has had a front row seat from which to observe the advantages that a strong brand holds for each franchisee.
When reviewing franchises for sale, keep in mind that a stronger brand can deliver a significant competitive advantage in securing the best properties and in attracting new customers in an efficient way.
A strong brand makes it easier to negotiate with landlords. If landlords are looking at the possibility of leasing a prime site to several different tenants, having a strong brand elevates you in the pecking order.
Most franchisees reviewing franchises for sale for the first time use shelf companies that have no track record, and they themselves as a franchisee may have no prior experience in running a business. From a landlord’s perspective, having a proven, well-known brand takes a degree of risk out of the leasing process.
A tried and tested brand already has put runs up on the board! You can begin operating more quickly. For example, getting plans through council tends to happen faster as there are already a number of test cases which demonstrate that the model enhances the local precinct.
"A tried and tested brand already has put runs up on the board! You can begin operating more quickly. For example, getting plans through council tends to happen faster as there are already a number of test cases which demonstrate that the model enhances the local precinct."
When a franchise with a strong brand opens a new location, the public already know the name and the product. In Anytime Fitness’s case, that has led to a couple of developments. Firstly, people skip the trial phase of their purchase -they just come in and join straight away -- without asking questions or wanting an initial trial membership period. Secondly, with a well recognised brand, when franchisees pre-sell memberships their conversion rates are far higher, as people are more likely to join.
The power of a network of locations is most evident when reviewing franchises for sale with strong brand recognition. Part of the power of franchising is contained in the brand. Whether a café or a fitness club brand, having a network allows people travelling between different suburbs for work or leisure to visit multiple units with the knowledge they will have the same experience at each location. Hence, a café might pick up an extra 10% of business via travelling customers, or in Anytime Fitness’s case, gain customers who prefer the convenience of having access to various gym locations.
Note, however, that this can be a double-edged sword, because the brand as a whole can suffer if the service experience differs in a negative way from one location to the next. Regular customer surveys and location audits are a must to protect all franchisees’ interests in the brand.
Clearly, it is crucial that you conduct research into branding issues before purchasing a franchise business. When considering franchises for sale, ask people you know whether they are aware of the brand. If the franchisor has conducted market studies, ask about the level of brand awareness in your area, and the public’s likelihood to purchase based on the brand. Keep in mind that the brand constitutes a large part of the value of any franchise business.