The 5 Benefits of Joining a Franchise System Early

Nov 22, 2022

When evaluating a franchise opportunity, it’s reassuring to see when someone has an established brand, they’re a seasoned franchisor, and have current, franchisee success. These variables indicate a track record of growth and success, which allays many fears and builds confidence into making a sound decision.

…But what about a brand new franchise opportunity?

What if you’ve just heard about an incredible business model that’s set to shake up an industry in dire need of change, AND that’s looking for passionate entrepreneurs to join their cause?

Depending on your comfort with risk, a chance to be “in the know” about an up-and-coming opportunity can either excite or scare you.

If you’re in the former, and you love knowing about new restaurants or bands before anyone else, and you want to apply that same energy into franchising, then let’s dive into the 5 reasons you’d benefit from joining a brand new franchise. 

#1: You Get the Franchisor’s Undivided Attention 

With a start-up franchise system, the first few brave franchisees need to succeed in order for the system to work and have credibility.  No franchisor wants to have a black mark on their brand when their first few franchisees don’t prove the concept. 

A new franchisor is highly invested in ensuring that the first 1-5 franchisees knock it out of the park. This means the CEO and their team will roll out the red carpet to help their initial franchisees — and, the franchise CEO is likely to have you on speed dial for the first 12 months! 

In an established brand, with hundreds of locations, the chance of a new franchisee being able to talk to the CEO, the visionary who’s idea they’re investing in, is highly unlikely.  Of course, there will be others in the business that will be able to help… but, if you’d like information straight from the source and want the energy and passion that only a CEO can provide, then investing early in a franchise model is ideal.  

#2: You Get to Help Build the Brand 

The initial franchisees in a start-up franchise model will have a direct and integral role in shaping, refining, and building the franchise brand.

In a good franchise system, franchisees provide frequent, invaluable feedback to the franchisor about how to improve the system.  This could include aspects like communication avenues, marketing, mentorship, brand messaging, operations, services provided, and much more!  

If you like contributing valuable ideas and you enjoy being a change agent in the companies you work for, then investing early in a franchise system would likely be a great fit.  In a more established franchise, there are more layers of communication that can dilute your ability to have influence, or delay how quickly your ideas get to the right people.  

Franchise advisory councils and quarterly meetings are great to help coordinate hundreds of franchisees and streamline feedback across a large company, but what if you could just talk directly to the CEO?  If that sounds appealing to you then consider working with a start-up franchise. 

#3. You Get First Choice on the Best Territories 

Do you want to open a franchise within 5 miles of where you live to reduce your commute and be involved in your local community?  For most people, the answer to this question is a resounding YES (unless you intentionally live in a rural area). 

When assessing established franchises, you may find that your “ideal” territory — especially if you live in a desirable location and city — is already taken.  It can be frustrating when you find the right business, but it would require you to either move your family or commute a large distance, adding time and frustration to your daily schedule.

Additionally, when you open a business outside your local community, you may lose your established connections that would have made networking and initial growth easier. 

But with a start-up or emerging franchise, you have your pick of “prime” location options.  You will be able to handpick (within franchisor approval), the right demographics, population density, and target market before someone else does.  If “location, location, location” is the bedrock of improving business success, then getting in on the ground floor of a franchise model gives you A-List access.

#4. Start-Up Brands Often Have Less Initial Fees

The larger a franchise becomes, the more management it requires to stay on course, stay compliant, and serve its franchisees.

This frequently leads to more technology, administrative, training, and compliance fees associated with the cost of franchise ownership.  On top of the franchise fee and royalties, there are a myriad of other small fees that can add up and eat into potential profit. 

With a start-up or emerging franchise, however, those fees likely have not been added to the franchise disclosure document since the brand isn’t big enough for them to be applicable.  The franchisor will reserve the right to add or increase them as the brand grows; however, the initial franchisees have an opportunity to start and grow their business before those fees kick in.

#5. Creativity and Flexibility Before the Brand Becomes Rigid 

Another reason to join a start-up or emerging franchise brand is so you can assert your creativity and insight into the brand. 

By nature, entrepreneurs want to have control over their business.  In franchising, there is a balance between control and following a proven system.  While being 100% owners of their franchise location, franchisees also need to adhere to brand guidelines outlined in the FDD.  For free-thinking, creative, and independent entrepreneurs, this can be challenging.

As a franchise brand grows, it learns what does and doesn’t work well for the business model, and the system becomes more finite and rigid. The old adage “We tried that, and it didn’t work” becomes more commonplace when new ideas emerge. And for some franchisees who are looking for a more concrete pathway to success, that model works just fine.

But, that’s not what everyone is looking for…

What happens if you want the mentorship, structure, and proven pathway of franchising, but you also want to flex your creative muscle from time to time?  This is where joining a start-up franchise can be the best of both worlds.

As a new franchisor brings on initial franchisees, there is a learning curve of mentorship, education, and transferring knowledge from the successful corporate location and team to the franchisee.  As the franchisor is learning what works best for knowledge transfer and education, a creative franchisee can play a major role in improving the system and the experience. 

In many successful franchises, it’s the franchisees that come up with unique solutions to complex problems or solutions that resonate with their target client. A famous example is when McDonald’s franchisees came up with the idea for the Big Mac.  

In a start-up franchise, your creativity can be an asset rather than being viewed as something of a hindrance. 

Ultimately, the choice to join an established or start-up franchise comes down to your own comfortability — figure out what you find important so you know what to look for in a franchise opportunity. And, before writing off new and emerging franchises, be sure to evaluate if it just might be “the next best thing” you can get involved with, benefit from, and use your creative energy to help build.