The Franchise Media Update Group in San Jose, California, reported that inquiries from entrepreneurs interested in buying a franchise opportunity are down nearly half.
Some experts believe the slowdown in franchise inquiries is a result of too many opportunities. The International Franchise Association (IFA) report that there are over 3,000 franchise businesses offering a business model.
“Franchises are carving themselves into categories and unlimited sub categories of specialty, creating mega competition,” reports Samuel F. Hirschberg, President of Hirschberg Direct, a Direct Marketing firm that specializes in working with franchisors, master franchises and area developers.
“For example, the fitness category, a sub category within the health category, is made of the mega gym, 24 hour gym, men’s only, women’s only, personal training specific, over 50, under 14, even babies, on and on.” With so many directions to go, the decision making process can be a daunting one for the potential franchise. Putting more pressure on the franchise model to provide the best possible opportunity.
But in today’s economy, a business must be on their “A” game, consisting of effective marketing, sales, operations and administrative protocols. Hirschberg says “Marketing and sales are paramount to a healthy system, which is why our organization has provided a bailout program to help franchisors get back on track.”
“Effective marketing and sales systems set a good example for the entire network. Not only do great methods bring in revenue to support the shareholders and the business model, but this flows to the franchisees, who are closely watching watching every move of the franchisor.”