Picking the Right Franchise For You: Customers

Who do you want to serve?

Picking the right customers is extremely important to picking the right franchise for you. These are the people you will be obsessing over for the foreseeable future. You have to have interest in this demographic and be happy interacting with them day to day. Also, their preferences is your limiting factor when you want to scale and their recession resiliency will determine your survival in the next downturn.

First, find the group you want as customers. Then, find the niche within this type of business that meets all your other criteria. For example, you want to serve seniors but you know in-home care is a 24/7 gig with a high employee count (two things you don’t want in this hypothetical situation). No problem, look at day cares or transportation. Same customers, totally different business model.

Here are the top customer types when it comes to franchising:

Small businesses:

This type of customer is a blessing and a curse. You can relate to these owners which means it is fun and fulfilling working with them. On the other hand, their tolerance for non-essential expenses is very low. You have to build trust and demonstrate how your product or service will save them costs or increase revenue while providing high quality. This can be challenging when you are just getting started but once you have a client, and you are providing quality work while saving money or increasing revenue, you will likely have a customer for life.

Their resilience during a downturn is largely based on who they serve. Are you selling to print newspapers? Probably a bad idea. Are you selling to restoration companies? They are very resilient.

Examples of franchises who have small businesses as customers would be business coaches, payroll firms, cost cutting analysts, janitorial services, window washing, line striping, and marketing.

Home owners:

Franchises who sell to home owners are typically offering a service of some kind, of which come in two varieties.

Need based- you can be the hero of the hour by providing a needed service when something breaks. Think plumbing, electrical, restoration, HVAC, and pest removal. Your business is on call to respond to crises allowing you to aid people in their time of need. This can be fulfilling work, but it is also fraught with customers who are on edge. They have a family who are trying to survive in 110 degree heat when

the air went out, they may have suffered major water damage from a burst pipe and lost property of great sentimental value, or they could have toilet backed up right before a big party. These people may be deeply grateful you are there are 2am or they may just be pissed at the situation and will direct their anger at you. Either way, they don’t have a choice but to get this issue resolved, and usually their insurance is paying for it so they aren’t hassling you about costs.

Nice to have- you can offer them an upgrade to make their life easier or their house more beautiful. Think window coverings, flooring, kitchen or bath remodels, maid services, lawn care, mosquito misting, or painting. This owner wants to be felt heard and have their preferences validated. They expect a high level of quality but are usually extremely grateful when the project is done. You will have a mix of customers who are cost focused while others are quality focused. Most are somewhere between the two and you will have to work with them to find a solution that matches their budget and personal taste. You will have some who make your employees a meal while they are there and some who will blame the mess their dog makes on your employees. Some of these industries are extremely resilient even if they are “nice to haves” so always do research on their performance during the last recessions.

Seniors:

This growing demographic is sometimes referred to as the silver tsunami. While often referred to as a monolith, there are various ways to break up the “senior” demographic. The two biggest categories are 1) the younger seniors with money and 2) older seniors on Medicaid. The younger and more affluent seniors want their own spaces for fitness and medspas. The older population want to age in place and will either pay to do so or will have Medicaid pay for them. This includes in-home care, daycares, transportation, and accessibility upgrades to their home.

Children:

This category incorporates all ages of children from 1 to 18. It can be athletics, educational, or recreational. Franchises in this space include sports, daycares, tutoring, STEM, music, trampoline parks, and basically any other activity a child does outside of school.

Consumer:

This is the catch-all for a business that sells things based on interest rather than a specific demographic. To make it clearer, how would you describe a person who eats at McDonald’s? You would call them someone who likes McDonalds! They could be a homeowner or homeless, old or young, rich or poor. This includes food, retail, and any general store.

Car owners:

This is a massive demographic that spans many different business models. Car ownership is a requirement for adulthood in most places in the US and the average age of a vehicle is 12 years old. As new car prices increase and the reliability of vehicles also increase, there is more demand for servicing these automobiles. Businesses include oil change (electric vehicles are still single digit percent of cars on the road), repair shops, repair shops, tinting, and after market parts.

Your Interests:

this could be a subset under consumer but warrants its own section. Many people start looking at franchising and say “I love XYZ” and want to get into that industry. It depends on your goals with this franchise but I rarely advise that route. Instead of owning a gym, why not own something that provides a better ROI with less competition and affords you the ability to go to whatever workout during the day you want. Some of these types of businesses are in booming industries and can scale but some are not. However, if you are happy with one location make a certain amount of money and your passion based franchise can get you there, then any of these could be a possibility. Examples include bars, hobby shops, gyms, pet related businesses, specialty shops, very simple businesses that your kids could run, and other interest based niches.

Conclusion

As you think about these customers, focus more on who you would want to serve on a daily basis. Even if you aren’t directly dealing with the customer as the owner, your views and passion about your customer will trickle down to your front line employees. Then, once you have the customers you most want to serve, focus on finding what business has all the other attributes you are looking for. This way you will still find a profitable business while also being excited about your customers.