Lesson # 4 From Hard Luck Franchisees: Buying a Franchise in a Saturated Market or Industry

 

I've seen it many times. A certain market or industry becomes "hot" and all the sudden franchises start popping up all over the place. For example, a few years ago the 24/7 fitness market took off. In the Des Moines, Iowa area there were all kinds of fitness franchises that entered the 24/7 fitness market. Unfortunately many of them went out of business and only a few major players remain.

This happens in other industries. Right now the self-serve premium yogurt market seems to be really taking off. You add the toppings yourself and then weigh the cup just prior to paying. Looks to be a "hot" concept. But in the end how many of these franchises will be around in 10 years? Don't know but it's safe to say there will probably be some winners and losers in that market. 

It's not a surprise that a significant percentage of franchises will fail. After all, the majority of businesses fail within the first 5 years. With the typical franchise agreement lasting 10 years, it's important to choose a concept that will have staying power rather than just the latest "hot" concept.

Buying a franchise is a major investment. Success is not guaranteed. Choose wisely.

For interesting reading take a look at this article on the Top Franchise Trends for 2013.

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Comments (1) Read through and enter the discussion with the form at the end
Joel Libava - February 14, 2013 5:23 PM

Great points,as usual, Rush.

So, shall we meet an Iowa frozen yogurt franchise?

It would be cool to finally meet :)

The Franchise KingĀ®

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