The Franchise Buyer’s Guide: The ‘X’ Factor
When we initially conceived of this series, we wanted to produce a ranking—a definitive list of the top franchise opportunities devised by weighing each of the criteria we’ve presented in this series and assigning a grade. Tim Horton’s may have gotten an A- because of its very strong national brand, but might have lost marks for concerns franchisees had expressed over lack of support from head office (for instance). McDonald’s might have gotten a B+ because of its solid reputation and product, but lost marks because the barrier to entry is extremely high (often well north of a $1 million investment).
We decided not to pursue our ranking because we felt there was greater value in giving you the tools as a prospective franchisee to weigh these criteria yourself; to equip you to best understand which factors matter most to you and why.
This is where we reach the limits of guide. Because while a franchise’s value, reputation, market outlook, and sales process are all critical factors in your decision, there may be something else—some indescribable, less-than-tangible factor—that may tilt your decision.
Such an “X factor”, by definition, doesn’t have a standard definition, but it can make a big difference. That difference will depend on you, and that specific franchise opportunity.
To close out this guide, we’ll look at a few franchises that, in our very humble opinion, have it—an “X Factor” of some sort. It’s not an exhaustive list of examples, but it does show that franchise opportunities can often offer something better than you expected.
Snap Fitness is a 24-7 gym franchise with locations around the world and over 1 million members. But what differentiates Snap from other fitness franchise opportunities is that it is highly customizable. New franchisees are free to create their gym however they feel is best. Layouts, size, and specific fitness offerings are at the discretion of the franchisee and can be adjusted depending on their customer base or the franchisee’s personality. If you like boxing, spin, or high intensity interval training, you can incorporate that. If you’re restricted by the physical size or layout of your location, Snap is flexible.
But that doesn’t mean franchisees are on their own either. Snap offers wraparound support for franchisees as they create their vision for their gym. These include proprietary business tools, member apps, virtual group fitness and heart rate monitoring. Head office also assists with all marketing and lead generation, and offer ongoing 1:1 operations coaching, webinars, an annual convention, franchise-to-franchise support, and best practice sharing.
Put simply, the “X factor” here is that you get all the benefits of the franchise structure, but also the freedom of a small business you’ve built from the ground up.
Au Pain Doré had quaint beginnings, as one may expect of a local Montreal bakery-café. For a few decades after its founding in 1956, that’s what it remained. Then in the 1980s, its clientele of restauranteurs and hoteliers made it something more. Today its products are in retailers like Costco and IGA, and its locations come in several different models from full scale restaurants to markets and kiosks.
What hasn’t changed over the course of this expansion is the brand’s commitment to the first principles that first set it apart as a Montreal bakery: good bread. Everything that Au Pain Doré serves—from bread to pastries—is baked fresh daily, on site, using 60-plus year old recipes. It doesn’t compromise on quality (margarine is off the table; all their pastries and brioches use pure butter, as they go out of their way to mention in their marketing materials), but the company is also large and capable enough to adapt to new trends. For example, all the coffee Au Pain Doré serves is fair trade and all its in-store packaging is environmentally friendly.
The “X factor” here is the history. While Au Pain Doré has grown into a huge franchise, its products have stayed true to its origins. It is, in spirit at least, still a small Montreal bakery.
When it comes to math tutoring, there is really only one game in town. Mathnasium was founded in 2002 based on the teaching method or Larry Martinek. When it was founded in the U.S. it was in recognition of the fact that many in-demand jobs required an aptitude in math (namely those in science, technology, engineering and medicine, or STEM as it’s often abbreviated), and that the education most children received in the U.S. wasn’t sufficient to win entry into the educational programs required to get one of those jobs.
What Mathnasium recognized was significant. Basic mathematical sense doesn’t require a natural ability the way certain other fields (such as athletics) do, but that many children were being turned off prematurely. “The strength of the Mathnasium Model lies in its individualized approach,” the franchise explains. “As no two students come to us as the same skill level, our approach includes a personal skills assessment designed to tell us where strengths and weaknesses lie for each student. We meet them right where they are and move forward from there.” It’s proven remarkably successful. Mathnasium has won scores of accolades and each of its 1,000-plus units has seen their gross sales grow, on average, a whopping 10% per year in each of the last four years.
The “X factor” here is the approach. Mathnasium has found a unique and personalized service that sticks—a service that is especially valuable because it is personalized. It’s done it in a market where that service is very much in demand.
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Opinions expressed here by Contributors are their own.