This is one of the better articles I’ve read recently giving readers an “inside look” at the franchising experience - what can go wrong, the competing dynamics and interests in the franchising business model, and financial and legal realities.

And that was just the beginning of Ross’s troubles. It seemed like her email account logged a new message almost every day, welcoming another Super Suppers franchisee to her region of the state while she was still struggling to attract new business. With neither the money nor the energy to advertise locally, she again turned to Super Suppers corporate headquarters for help.

While I’m sure the new franchises weren’t technically encroaching on her protected territory, it still has significant impact on sales.

Even if no more new Texas franchises were sold, she would still see many new locations pop up in the near future. Not to mention the “other guys” — Dream Dinners and Dinners Ready!, among others, were beginning to make multiple appearances around town. Unlike franchises that can thrive in heavily saturated markets (Starbucks, McDonald’s), a meal-assembly center needs a large number of households in any given territory to be successful. According to Bill Byrd, it takes 500-700 households to support a Super Suppers, but he concedes the divvying up of territories is “not an exact science.”

Whenever there is a “hot” segment, copycats franchisors are only months behind. Success breeds competition, and the competition can ride your wave and simultaneously learn from your mistakes without experiencing the costs. Potential franchisess must evaluate whether their soon-to-be franchisor will constantly innovate and improve to stay ahead of the competition.

For example, a less-experienced franchise owner wouldn’t know that regional and national advertising in a franchise-based business plan is usually rolled out well after a significant number of stores have been opened. “They usually try to pack a lot of franchise locations into an area before advertising so that they get some value,” says Letier. Bill Byrd says Super Suppers will begin advertising nationally at “around 1,000 franchises.” By this projection, franchisees have a long wait ahead of them. For the time being, Byrd says, “A lot of our [marketing] is to go in and talk to moms’ groups, PTAs, and church groups and tell them the story about Super Suppers.”

The franchise sales team or “independant consultant” didn’t highlight this for you? Oh yeah, they want to close the sale so they earn their commission.

Hat tip: Anonymous in the forum

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