Imagine the following: An empty room with two chairs, a table, and both of us sitting in front of each other. On that table, there’s a pile of cards with a brand logo on each one. Some of the brands are famous, others are not. I bring in two buckets and ask you to play a game with me. The game rules are very simple: Put the best brands in one bucket and put the weakest in the other. If your choices are right, you win.
Now, you can easily recognize some of these brands. They are on billboards, on TV, and on the radio. One of them even made it to your social media feed a while ago. Those must be famous, you might think, right? But then you pause and wonder: “Are these brands really the best ones, or was I just biased to the ones I know?”
Here you’ll start asking for more information to make this a fair game. “The beauty of the logo is not enough” you might say. As a franchise consultant who has been in the business for a number of years, I can’t help but agree with you and grant you four types of information to make it a fair game.
Financial Status
The first thing that comes to mind when evaluating a brand is its net worth in the market. If the company is financially strong, it should be a good brand, right? Well, not necessarily. This is where many people forget to differentiate between financial equity and profitability. The brand might have a great amount of assets, but it’s slowly going out of business.
For our game, you’ll ask for net worth and proof of profitability over the past years to see for yourself how every brand is doing. This is what every investor does before purchasing a franchised business. Successful brands can easily show their records of success over the years. But this might make you wonder: How did they overcome the hard times such as COVID-19?
Resilience
In a study conducted between March 2020 and February 2021, the number of business closures during the COVID-19 pandemic reached 100,000 businesses above the traditional exits every year. COVID-19 was a reminder for investors to check how strong businesses respond to such extraordinary events.
During COVID-19, many brands changed their strategies entirely. Some came up with new COVID-19 “essential” product/service lines. Others invested in their digital stores and delivery services to adapt to the new normal we had to face. We like to say the strong survived and thrived but the weak are gone.
The pandemic flipped things around and accelerated technology adoption. For our game, you’ll ask for proof of resilience on how this pandemic and other recessions affected each brand. However, technology acceleration might bring another idea into your mind: Is the brand future-ready?
Niche in The Market
Before investing in any business, investors usually run multiple scenarios in their heads to see if the brand is future-ready or not.
For example, if someone proposed investing in a fax machine brand, then they will probably be rejected immediately. Today, we’re only one click away from reaching all our documents. Fax machines are fading away with time and becoming obsolete. Once you ensure your brand is future-ready, you’ll be confident to say that you’re moving in the right direction.
For our game, you’ll ask for each brand’s niche and where it positions itself in terms of today and tomorrow. Still, as we speak of today, you may wonder: Who’s leading the brand to that successful future?
Executive Team
Even after having a rough day at work, going to a good restaurant can make your day just perfect. You love the atmosphere, the staff, and the food. The restaurant executive team is positioning their teams and strategies to help focus on their customers’ experience.
One of the key elements in driving your brand to success is ensuring that whoever is in the driver’s seat of your business, knows exactly where the brand is going and how to get there.
For our game, you’ll ask for summaries about the executive teams and their experiences in the market. You want to check their qualifications and ensure they’re the right team before making your final decision.
Now that you have the information you need, you can easily put the right cards in the right bucket and set yourself up to win. After the game, you’ll even be ready to invest in a franchise yourself. Just make sure you have someone who can provide you with the information you need for each card, and that someone is your Franchise Consultant.