Do established franchises really have an edge over emerging franchises?

Recently I came across an article by Jeff Lefler The Top 3 Reasons to Invest in an Emerging Franchise. The article sums up the advantages of investing in an emerging franchise. As the founder and CEO of just such an emerging franchise, I can certainly attest to these benefits.

Lefler explains that franchise systems are designed to reduce risk. But if the underlying franchise or business model is flawed then the risk is actually increased.

Advantage 1 - Lower turnover rate

Emerging franchises - those with less than 25 outlets - are often perceived as a higher risk investment. However the figures Lefler quotes indicate that newer, smaller franchises actually have a lower turnover rate than the larger franchise systems. (Turnover rate being the rate at which franchises are closed or transfer ownership).

Advantage 2 - Better communication

The article also suggests some other advantages that emerging franchises enjoy. An important one is that good communication with the CEO is more likely in new franchises. As any Stroud Homes franchise owner knows I am definitely a hands-on business person who loves to help develop the skills of others.

Advantage 3 - Getting in on the ground floor has its perks

Finally, getting into a franchise system on the ground floor also means that franchisees start off in a better bargaining position. With fewer players, they can negotiate territories and agreements that better suit their requirements.

Take the first step

If you’ve been thinking about getting into a home building franchise (especially in NSW and Victoria) we’d love to hear from you.