Expanding into new markets through franchise partners is an exciting opportunity for any business — but it’s also one that takes a lot of planning. Here’s what to think about when picking your partners.
As the founder of a real estate brokerage, I know firsthand that growing into new markets through franchise partners requires great thought and strategy. While expanding into new territories through franchises is exciting, it is crucial to select the best partners.
The same can be said for an entrepreneur exploring investment in the real estate franchise space. All groups involved must carefully evaluate their options and consider each party’s unique offerings and support system before deciding. I’ve outlined three things to consider when selecting the right partners in franchising.
1. Research markets
It is essential to research markets before you research franchises. Evaluating if the franchise you are considering has market opportunity should be one of the initial steps in the process.
Identify feeder markets with the most significant opportunity. Consider shifts of where buyers are coming and going, especially since the onset of the COVID-19 pandemic.
Once you’ve identified the top markets with the most opportunities specific to your business, the next step is targeting the groups you might be most interested in. Don’t fall in love with a franchise brand or potential partner before doing your homework and making a bad business decision.
Put together a franchise growth plan, and then find the right system and group that helps you achieve your business goals.
2. Consider corporate culture
A new franchise contender must be aligned with the existing real estate group’s corporate culture. A long-term relationship is built on a foundation of shared core values and strategic vision.
If you are a firm that believes the people behind your brand are your biggest asset, you should seek a partner that takes pride in the professional development of their agents and employees.
For us, first and foremost, a future franchise partner needs to be a believer of our brand and culture. Partner with one who appreciates the value of your brand and understands the importance of marketing your brand in their market. This will help a new franchise keep an edge on the competition and achieve all upcoming business goals.
Help franchisees create and embrace your culture. One way to do this is by including franchises in all corporate events, meetings and by providing resources to help franchises fully utilize the existing brand. Ultimately, being a champion of the brand helps maintain a long-term business relationship.
3. Be selective
Whether you are the franchisee or franchisor, interview your potential partner like it’s the most crucial decision you’ve ever made. Entering a business partnership should never be taken lightly. Be sure to vet each other’s backgrounds, business history, and financials, and request references.
If you are a potential investor, speak to their existing franchisees in different markets and ask questions about their experience to date. If you are a franchisor, check in with existing business partners, vendors, and other individuals who can account for the integrity of the party in consideration.
Finally, consider the structure and support within the corporate team. Evaluate existing marketing, technology, infrastructure and other vital services and platforms and how they will positively impact business.
Ask for case studies or examples of how the existing support structure works as a true testament to the brand. Take time selecting the right partner for your growing business.