Franchise owners who want to capitalize on franchise-friendly consumer spending should take time to analyze their overall business strategy now, in order to get maximum benefit from increased consumer activity. Here are four key areas to consider.
Strong employment and economic numbers mean continued consumer spending beneficial to franchise owners, in particular. Employment strength in key segments including automotive and restaurants could mean continued good news for the economy overall.
4 Questions Can Help Franchise Owners Capitalize on Franchise-Friendly Consumer Spending
Is the Franchise Living Up to the Brand Standard?
Brand awareness could be playing a key role in the shopper’s decision to favor franchise businesses over competitors. This is an ideal time for franchise owners to evaluate their location and ensure that it is fully compliant with brand standards, not only in policies and appearance, but in the intangibles a brand may have come to represent, such as its values and attitude.
Is the Franchise Providing a Better-than-Expected Customer Experience?
Franchise location standards and policies set the stage, but it is still up to franchise leaders to evaluate the customer experience and find ways to make it better – better than the customer expected and better than the customer will experience at competitor’s locations. This could be an ideal time for franchise owners to:
- invest in employee development and training relative to customer service
- have their stores shopped for independent feedback
- shop competitor’s stores to compare the customer experience
- empower staff to solve customer problems as quickly as possible
- upgrade credit card processing equipment and loyalty marketing software to better-serve local customers
Is the Franchise Contributing to Local Marketing?
Although franchise owners often benefit from brand name recognition, national and regional advertising and other marketing provided by parent organizations, that does not mean there is not more that can be done to help promote their own locations. In fact, supplementing the marketing done by the parent company with the same local marketing tactics that small and independent business owners employ could help a franchisee grow their own locations more quickly.
Is the Franchise Ready to Grow?
A franchise-friendly rise in consumer spending could represent the ideal conditions for a franchise to add additional square footage to its location, increase the number of employees, or expand by opening new stores. If a location is already fairly busy, increased consumer activity might even be difficult for the store to handle, so having a plan for hiring, growth and expansion is critical.
With U.S. shoppers sending signals indicating consumer spending will be adequate not only to sustain but to grow businesses in the months to come, franchise owners have a real opportunity to gain market share. By analyzing the customer experience and planning for future growth, they can quickly position their stores to grow and become more profitable.
Growth in Key Employment Segments Indicate Franchise-Friendly Consumer Spending
According to 2010 data published by the U.S. Census Bureau, just over one in 10 U.S. businesses are franchises. In 2016, franchise employment grew at an average of 0.4%, twice that of small businesses comprised of 1-49 employees which has enjoyed a 0.2% monthly average employment growth. 20,000 of the 205,000 jobs added in January 2016 were in the franchise sector. Among the sixteen sectors reflected in the report, nine showed net gains including:
- 5% – Gas Stations and Auto Repair
- 5% – Personal Services
- 5% – Building Material and Garden Equipment
- 5% – Manufacturing
- 4% – Restaurants
- 3% – Auto Parts and Dealers
- 2% – Food Retailers
- 1% – Professional Services
- 1% – Real Estate
While rental franchise employment growth remained unchanged, five franchise employer segments experienced net job losses; including:
- -0.6% – Business Services
- -0.4% – Education
- -0.3% – Accommodations
- -0.2% – Leisure
- -0.1% – Other
With growth rates of employment rates for U.S. franchises double those of the private sector, franchise owners should be paying attention to the reasons that might be bringing consumers in to their businesses vs. their non-franchise competitors. Given that one of the advantages franchise owners enjoy is brand name recognition, it may be presumed that shoppers are choosing to spend their money in establishments where they are confident of the customer experience and quality products and services they expect to receive.
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