Franchise Expansion: Best practices for targeting markets and selecting franchises
In the final installment of CSA Online’s PizzaRev series, we’ll explore the importance of choosing franchisees with a particularly discerning eye, and the process by which franchisors evaluate potential expansion markets.
FRANCHISEE FACTORS
While attracting franchisees is an ongoing focus and, at times, challenge for franchisors, it is also critically important that franchisees are selected with great care and consideration. The franchisor/franchisee relationship is one that can span decades, and approaching that relationship as a true partnership is often the lynchpin to success for both parties. Yet, it won’t last if certain tenets are not put in place and honored throughout the process.
Franchisor requirements will vary widely based on the business model. PizzaRev, for example, is looking for multi-unit operators with a history of ownership with at least one national restaurant brand. Further, they believe it is advantageous to have a franchisee with roots in a particular market or region from their current or previous restaurant brand experience. Finally, connectivity to a market area with that previous experience yields many benefits—from infrastructure and consumer loyalty to real estate knowledge to community involvement.
It is not to anyone’s advantage to have a sharp learning curve with a “new brand.” In fact, working with franchisees that have been a part of a national brand and have deep operational experience works in favor of the franchisor and brand alike.
Yet, in the case of PizzaRev, the franchisor understands that, as an emerging brand, a unique set of challenges—like on the ground marketing and highly integrated social marketing—exists. A new brand doesn’t offer an out of the box national campaign that the local franchisee can simply tap into and deploy.
“Our strategy blends traditional advertising/marketing techniques with intensive social media to achieve our goal,” said Irv Zuckerman, co-founder of PizzaRev. “Establishing that understanding with the franchisee is integral to our mutual success and a strong suit of ours.”
It is not necessarily difficult once all parties understand the game plan and its implementation, yet it is critical to make that knowledge sharing and transparency a central part of the plan.
“We have always been marketers, and view that as a differentiator and strength when signing a new franchisee to PizzaRev,” continued Zuckerman. “In order to build PizzaRev’s brand character, we need to achieve a personal relationship with our customers, and social media is a great aid to achieve that goal.”
MARKET METHODOLOGY
If finding the right franchisee partner is the foundation for success, market selection represents an important building block. Selecting a market takes a great deal of research and understanding, both of the geographic region in question and the demographics of area consumers.
“We look for populations that are dense enough to handle a volume-oriented business and, ideally, have a solid millennial base and/or workplace population,” Zuckerman added. “I like to think of an area that has energy and vibrancy as part of its fundamental makeup.”
Certainly, the mix and match of all destinations is a significant decision for all retailers, but fast casual dining takes on a unique character. There are many locations that are a great fit for fast casual concepts, and franchisors like PizzaRev utilize sophisticated software to optimize location selection.
“As a retail real estate broker, I am constantly evaluating developments and whether retail clients will fit into certain projects,” stated Bob Haas, principal with Cypress Retail Group and Los Angeles area broker for PizzaRev. “Irv and the PizzaRev team take great care to establish new locations in markets that simply make sense for the brand. That effort is evident in the early success of the brand, which has opened 20 locations in a remarkable timeframe.”
In the coming months and years, PizzaRev will continue to deploy the strategies that have been effective thus far—partnering with the right franchisees in the right markets at the right time.
In the final installment of CSA Online’s PizzaRev series, we’ll explore the importance of choosing franchisees with a particularly discerning eye, and the process by which franchisors evaluate potential expansion markets.
FRANCHISEE FACTORS
While attracting franchisees is an ongoing focus and, at times, challenge for franchisors, it is also critically important that franchisees are selected with great care and consideration. The franchisor/franchisee relationship is one that can span decades, and approaching that relationship as a true partnership is often the lynchpin to success for both parties. Yet, it won’t last if certain tenets are not put in place and honored throughout the process.
Franchisor requirements will vary widely based on the business model. PizzaRev, for example, is looking for multi-unit operators with a history of ownership with at least one national restaurant brand. Further, they believe it is advantageous to have a franchisee with roots in a particular market or region from their current or previous restaurant brand experience. Finally, connectivity to a market area with that previous experience yields many benefits—from infrastructure and consumer loyalty to real estate knowledge to community involvement.
It is not to anyone’s advantage to have a sharp learning curve with a “new brand.” In fact, working with franchisees that have been a part of a national brand and have deep operational experience works in favor of the franchisor and brand alike.
Yet, in the case of PizzaRev, the franchisor understands that, as an emerging brand, a unique set of challenges—like on the ground marketing and highly integrated social marketing—exists. A new brand doesn’t offer an out of the box national campaign that the local franchisee can simply tap into and deploy.
“Our strategy blends traditional advertising/marketing techniques with intensive social media to achieve our goal,” said Irv Zuckerman, co-founder of PizzaRev. “Establishing that understanding with the franchisee is integral to our mutual success and a strong suit of ours.”
It is not necessarily difficult once all parties understand the game plan and its implementation, yet it is critical to make that knowledge sharing and transparency a central part of the plan.
“We have always been marketers, and view that as a differentiator and strength when signing a new franchisee to PizzaRev,” continued Zuckerman. “In order to build PizzaRev’s brand character, we need to achieve a personal relationship with our customers, and social media is a great aid to achieve that goal.”
MARKET METHODOLOGY
If finding the right franchisee partner is the foundation for success, market selection represents an important building block. Selecting a market takes a great deal of research and understanding, both of the geographic region in question and the demographics of area consumers.
“We look for populations that are dense enough to handle a volume-oriented business and, ideally, have a solid millennial base and/or workplace population,” Zuckerman added. “I like to think of an area that has energy and vibrancy as part of its fundamental makeup.”