Your Franchise Needs Castle Walls or A Deep Moat

Imagine your franchise is a strategic piece of land where towns people come to do business. You need to protect it from the other nations who want to profit off that land. You can build large castle walls, you can dig a deep moat, or you can do both.

Barriers to Entry

Barriers to entry create a moat around your company that is hard for the average person to cross. They make your business more valuable and reduce competition. However, they can also make it harder for you to enter the market. You need to decide which barriers are important to you—if any at all.

Unique Selling Proposition (USP)

If the franchise doesn’t have a strong barrier to entry, it needs a clear USP. This is what makes the business stand out and why customers will choose it over other options. A clear USP is like strong castle walls that keeps your customers feeling like you are the safe decision. A good franchise should already have a proven USP so you’re not struggling to get traction early on.

The easiest way to test if a franchise has a strong USP is to speak with new franchisees and ask how fast they’re growing.

Barriers to Entry

Capital

Some businesses are capital intensive, which naturally keeps out competitors. An in-person store costs more to start than an online one, so you’ll usually see more competition online.

You can start a basic power washing business for cheap, but if your franchise uses custom trucks designed to clean faster and better, you’ll be able to do jobs others can’t—and that gives you a real edge.

Complexity

Some businesses are hard to run unless you have specific skills—financial, operational, or otherwise. This complexity discourages newcomers or causes them to fail.

If you're entering a complex business, only do it with a proven franchise system, and talk to franchisees who started with no industry experience.

Licensing

Some businesses require special licenses or certifications for you or your staff. That could mean contractor licenses, Medicaid approval, trade certifications, or insurance approval.

These requirements create a barrier to entry—but also make hiring harder and more expensive. Often, these businesses are in the trades, where many “Chuck in a Truck” operators are technically skilled but lack business skills. That gives you the chance to hire them, pay better, and still run a more profitable business.

Exclusive Access to Supply or Distribution

If the business relies on proprietary materials or locked-in supplier relationships, it becomes very hard for competitors to replicate.

Example: A franchise with a patented insulation product or national medical supplier deals that aren’t available to independents.

Unique Selling Propositions

Brand & Reputation

Established brands carry trust and recognition that new businesses lack. A strong franchise brand helps you win customers from day one—even if no one has ever heard of you.

Example: A new cleaning business has to beg for reviews. A franchise with hundreds of locations is already trusted before the first job.

Economies of Scale

Larger franchises can often buy materials, services, or software more cheaply. This lowers operating costs and increases margins—something independent competitors can’t match.

Example: A senior care franchise might get background checks, payroll, and insurance at huge discounts thanks to its size.

Technology & Systems

Proprietary software or automation can create a lasting advantage—especially if the franchisor controls and improves the system over time.

Example: A home services franchise using AI for scheduling will run smoother and convert more leads than a solo operator using spreadsheets.

Final Thoughts

A business doesn’t need all—or even any—of these barriers to be successful. But knowing which ones matter to you helps narrow your search. You want to avoid a business where 100 mom-and-pop competitors could pop up overnight and steal your customers.

If there’s no significant barrier to entry, then the franchise you’re considering needs a strong USP. That way, even in a crowded market, you’ll be positioned to win.

Ultimately, the best franchises have barriers to entry, a strong USP, or both.

And the best way to confirm either? Talk to franchisees.

• Ask new franchisees how quickly they grew.

• Ask experienced franchisees how they’ve handled competition over time.

If you have a deep moat to keep competitors out and big walls to make customers feel safe, you can be confident you will keep your land for years to come!