Why Are Other People Opening Franchises? And Why Should I?
Since the mid 90’s the number of small businesses in the US has been growing - and fast! It makes sense why - it gives you an opportunity to do something more interesting, to have more flexibility, and to be your own boss. Beyond just small businesses in general, franchises have been seeing particularly strong growth in the post-recession period. Franchises have grown to represent more than 4% of all businesses in the US and account for nearly 50% of all retail sales. So with more than 900,000 franchise businesses in the US we were wondering if we were right about why people are opening franchises? Is it for the flexibility? For the career change? For the freedom of being your own boss? Or for some other reason all together?
Over the past eight months we’ve been running a quiz to try to match people with the best franchise for them. One of the questions we’ve asked everyone is why do they want to open a franchise. We went back to the data from April and May to try to figure out what is driving people to open franchises. In the end the data was pretty clear cut and there was only one winner. As we initially speculated some people open franchises because they want more flexibility, or they want a more satisfying career, but neither of those are the primary reason for most people. The number one factor is that most people want to open a franchise to make money. More than 50% of the quiz takers reported that money was their primary consideration when it came to opening a franchise.
This came as a little bit of a surprise to me.but at the end of the day it makes sense. Franchises might be a good opportunity for people to make a change in their lives, but at the end of the day they are a major investment. And as with all major investments you’re probably making it with the intention of making money. So if you are thinking of opening your own franchise to make more money, have more flexibility, or have a more fulfilling career you’re not alone.
Interested in opening your own business? Try out our quiz for yourself and find your perfect franchise opportunity today!
Chick-fil-A Wants You to Eat Less Kale?
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For new franchisors, standing out from the crowd can be a task of epic proportions. Selecting a strong and memorable trademark is certainly an important (indeed, critical) first step, but for the relatively unknown, picking a trademark that is too abstract can occasionally be viewed as a step in the wrong direction—you want to stand out, but you also want people to actually know what you do or sell.
Quantifying Yelp's Impact on the Restaurant Industry
Luca studied the effects of Yelp ratings on the revenue of restaurants and discovered several interesting findings. Studying the relationships of restaurants' revenues to their Yelp reviews in Seattle over a period from 2003 to 2009, he found a significant relationship between a restaurant’s average rating and revenue. One star’s worth of improvement on Yelp leads, he found, on average to an increase of between 5 and 9 percent in revenue. The average rating is more important than the review, as many Yelp users are overwhelmed by the sheer number of reviews on manyrestaurantpages and find it easier to consult the star rating. Luca also found two features which exacerbate the effect on revenue Yelp has. First, the more reviews a restaurant has, the more impact an increase in its Yelp rating will have on its revenue. Second, the more reviews by Yelp “elite” members, the more impact; “elite” reviews have almost twice as much impact as other reviews.