Franchises are Upping Their Game to Entice Prospective Buyers

The franchise market is jam-packed, and tons of brands are hoping to stand out to potential franchisees by offering big incentives.

From restaurants to health care, a host of franchises in all sorts of niches have sprung up over the past few years. The result is a buyer’s market, and chains are piling on incentive deals to garner attention. According to a recent article in The Wall Street Journal, many new or small chains are offering such enticements as discounted franchise fees and reduced royalties—all in an effort to ease the way for first-time buyers who have trouble landing financing. Meanwhile, larger chains with more chain recognition are mostly targeting existing owners with multiple stores.

And experts aren’t expecting these incentives to go away anytime soon—because so far, it seems to be working.

Cincinnati-based Buffalo Wings & Rings saw incredible growth in their 30th anniversary year, due, in large part, to the way they celebrated those 30 years—by slashing their franchise fee by $30,000 to $5,000. That year, the brand awarded 17 units.

“Franchisees can pay up to $2 million to buy and set up an outlet, and in the grand scheme of things, $30,000 doesn’t seem like a huge amount—but it is to those investors,” said Dan Doulen, Buffalo Wings & Rings’ director of franchise development. “They think about every penny they spend.”

According to Nick Powills, chief brand strategist for No Limit Agency*, incentives are also a way for small chains to get buyers to try out secondary markets. For example, if the Chicago market is sold out, a small chain might offer buyers better deals to target smaller Peoria, Ill.

But at the end of the day, do these incentives make a difference even for prosperous multi-unit franchisees?

Powills thinks they do.

“The wealthiest people in the world still want the best deal,” he said.

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