Growth Club
1851 Growth Club
The Impact of Local Market Conditions on Franchise Scaling
Many franchisees want to expand their business, but with new markets come new dynamics. Here’s how to navigate varied local market demands while maintaining brand consistency.
1851 Franchise spoke with Dan Ogiba, vice president of real estate at Sola Salons, and Elanor Smith, franchise development manager at Best Brains Learning Centers, to hear their insights on how local market conditions can impact franchise scaling and how franchisees can adapt accordingly to continue pursuing growth.
Key Local Market Factors That Impact Scalability
Local markets can vary greatly from one another, from culture to demographics to tastes.
“There are a number of key local market factors that franchisees must consider as they scale,” Ogiba said. “These include the basic building blocks of demographic research such as total population, population density and incomes, but expand to reviewing traffic patterns and understanding the key retail nodes in a market.”
Understanding the local market in which your franchise is located is step one to ensuring the success of your business. This includes acknowledging how the local market of one location differs from another if you are a multi-unit franchise owner. Once you understand the differences, you can accommodate them.
Adapting to Local Markets
Where do you even start when trying to adapt your business to the needs and desires of your local market? Ogiba advises starting by speaking with the franchisor for your brand.
“A partnership between the franchisee and the franchisor is of critical importance when working to accommodate local market dynamics,” said Ogiba. “As franchisors, we are able to bring to the franchisee data and information from our analytics software and team.”
Your franchisor has a responsibility to support and guide you, so be sure to utilize that resource. Beyond your own brand, Smith advised reaching out to other business owners within the local market.
“I am a big advocate for embracing networking within the community and with other local business owners,” said Smith. “It's not just for visibility of your business; it's about finding allies and finding people who are going through the same thing you are. If you make connections with other business owners, even if they are not in the same industry as you are, and you see them succeeding, it motivates you to try new things and take risks too.”
Exchanging insights and ideas with business owners within your market is a great way to support each other and learn more about the community your business is in.
Finding a Balance: Consistent Brand Identity vs. Local Demands
Although you want to cater to your local community’s preferences, you need to be cautious about losing brand consistency. Some franchises, such as Sola Salons, factor this dilemma into their model, making it easier for franchisees to find the balance between keeping a consistent brand identity across multiple locations and meeting local demands.
“Sola is uniquely positioned to capture the demands of a local market based on the flexibility and personalization within individual beauty professional’s studios,” explained Ogiba. “Each studio is able to shine with the personality of the owner and be customized to fit the brand identity of the beauty professional as they want to present in their market. In the lobby and common areas, our design guide allows for a set of choices for the franchisee to make in order to best represent the brand in the market they are operating.”
The franchisor may give you a choice of options that you can tailor to each local market. As for the decisions you have to make on your own, Smith advises doing so with the brand’s values and mission at the core of your choice.
“I’d suggest embracing the space where the brand ends,” said Smith. “We have tried really hard to create a ton of templates and ideas for our franchisees, so they don't have to reinvent the wheel, but they have to look at what the people in their area want. They should be looking at their direct competitors and focusing on what’s happening in their given industry within their own city. Then, they should make their own plans to fill in any gaps that the franchisor doesn’t necessarily address, but do so in the spirit of your brand, relying on the brand’s mission statement. Choose options that will align with that and the brand will feel consistent across locations.”
Scale Into New Markets Thoughtfully and Successfully
As you expand your franchise empire into new territories, the ability to navigate local market nuances is vital. By leaning into collaboration with the franchisor, leveraging community networks and balancing brand consistency with local demands, you can effectively scale your business.
Interested in learning more about scaling your business? Check out these stories and resources:
