When you are about to buy a franchise you must look at the competition both from others companies, and from the franchise brand, and ask what is a reasonable distance between stores?
Competitors are normally not a great problem, and in fact, as in the case of homemaker centres and certain types of shopping centres or shopping strips, neighbouring competition can actually be an advantage.
This is what we call “clustering”. Name a reasonably sized homemaker centre/precinct, and count the bed stores, furniture outlets and electrical retailers. Experience has shown that these retail outlets actually work best together, as the combined drawing power of the homemaker centre far outweighs the advantage of being out on their own.
Article was published on Expert Advice page, Business Franchise Australia & New Zealand Magazine Sep/Oct 2013 and Franchise Asia October 2015
Creating a Territory Plan or having Preferred Marketing Areas is a desire of most franchise systems, however evolving into a good system can be a nightmare.
Most Territory Planning exercises we handle begin from the “Beer and Pizza” approach, and in many cases have evolved at people’s discretion. The “Beer and Pizza” approach is normally when a group of management (and some franchisees), converge around a map on a Boardroom table with beer, red wine, a couple of pizzas and a black crayon, and some good ideas! Inevitably it is built around where existing stores are, or where dominant Franchisees want to have as their exclusive territory. The downside is uneven opportunity in territories, overlaps and spaces in between, which we call no man’s land.
I am a very keen Hawthorn fan, and now have the personal record of attending 7 Grand Finals in which they have played – and seen 7 Premiership wins.
So what does Hawthorn do differently from the other 17 teams in the AFL? They work to Their Rules – and do it the best way possible. Whilst I cannot say I am an expert, these are my views – and I think they have a real business connotation:
Hawthorn has been amazing at identifying young talent, and then developing it over a few years. Some of this talent comes in quickly, but they are not scared to wait and let the bigger boys develop, even if they play in the Box Hill Hawks for a couple of seasons.
Peter Buckingham is the Managing Director of Spectrum Analysis Australia. He is a certified Management Consultant, and a Fellow of the FCA and IMC.