Franchise prospectuses are full of stories about why people decided to invest – and I am including ourselves in that!
Ask almost any franchisee why they joined their chosen brand and you will hear plenty of compelling reasons: they believed in the business model, saw an opportunity in the market, liked the people behind the brand or had a personal reason to want to build something of their own.
There is nothing wrong with asking that question. However, if I were considering investing my own money into a franchise today, there is another I would be much more interested in.
Why did you stay? Or even better still, why did you invest again?
Look beyond the sales numbers
Franchise growth makes for a great headline. New franchisees, new territories and new locations all demonstrate demand for a concept.
However, new franchisee recruitment only tells you what people thought about the opportunity before they experienced it.
For a prospective franchisee carrying out their due diligence, what happens next can tell you considerably more.
I recently saw an interview with our very own Global CEO, Ty Menzies who posed the important question that potential franchisees should be asking; ‘Is this a franchisor that is still going to be helping me build a better business five or ten years from now?’
The answer to this lies within your current franchise network. See how many franchisees are still with you a decade later, how many have sold their business or how many own multiple locations.
At Snap Fitness, 65% of our franchisees are now multi-club owners, while 30% of our trading franchisees operate three or more clubs.
Our longest-serving franchisee has been with us since we launched in the UK 13 years ago, with multiple others having now been part of the network for more than a decade.
Those are numbers I believe a prospective franchisee should be every bit as interested in as the number of people joining.
The second investment says more than the first
There is another statistic I am particularly proud of. Over the past three years, we have opened 24 new Snap Fitness clubs across the UK and Ireland.
Seventeen of those 24 were opened by existing franchisees. Put another way, over 70% of that growth came from people who already knew exactly what owning a Snap Fitness franchise involved.
They have experienced the challenges alongside the successes. They have worked with our Support Office, seen how the model performs, managed their costs, built their teams and experienced the day to day reality of operating a club.
Armed with all that knowledge and seeing how we are developing the brand and model, they have chosen to invest again.
Getting somebody excited enough about an opportunity to make their first investment is one thing. Creating an environment where they have the confidence to make a second, third or fourth is something else entirely.
Retention is not about standing still
Of course, longevity alone should not be treated as proof of a great franchise.
A franchisee can remain within a network without necessarily wanting to grow. That is why I think prospects need to consider retention and reinvestment together.
It is also why franchisors cannot assume that a model which attracted a franchisee ten years ago will automatically retain them for the next ten.
The market changes. Consumers change. Competition changes. All while franchisees themselves become more experienced and commercially savvy.
For us, that has meant continually investing in our brand. Our clubs today look very different to those we were opening when we first entered the UK 13 years ago, with our model evolving to incorporate areas such as Reformer Pilates, recovery, new programming, technology and a significantly evolved club design.
Support has to evolve too. The needs of someone opening their first business are very different from those of an established operator looking at clubs three, four and five.
