which stage of a franchise life ccle is the best time to buy


As you start looking for potential franchises, you need to consider various aspects, including the stage. Every franchise concept has three life cycles. Here we look at what these are. This information will help you understand at which point to venture into it so you can hit the ground running.

The Life Cycle of a Franchise Business

The three stages of a franchise life cycle are:

1. The Mature Cycle

A business in the mature cycle will have been around for a long time, and it will have a recognizable brand with scores of stores. Although the network is in this stage, it still has scope to absorb more franchisees into its fold. You should research the company to determine whether you are interested in selling that product or service and consider which locations could work in your vicinity.

2. The Middle Cycle

A franchise in its development’s middle stage will have a sizeable number of locations and a fair amount of brand recognition. These companies offer a range of opportunities and have many unsold locations or territories, which is advantageous. Increasing your chances of getting an excellent location for your venture. It’s essential to understand that you might not always get the area you prefer because:

  • The cost may be higher
  • Other brands might be eyeing that exact location
  • The franchisor might not be on the same page about a location’s viability

3. The Last Franchising Cycle

This franchising cycle regularly features in the media, helping to generate the interest of potential franchisees. These companies are in the initial stages and the last of the franchising cycles. These new or early-stage franchises are popular because they may be less expensive than ones with an established standing in the market. Once again, it is essential to research the company, understand how it is faring. Determine whether the brand has made a mark to some extent.

Which Franchise Cycle Is Best For You?

You need to consider three aspects when entering the franchising phase- Availability, opportunity, and tolerance level to risk. Here is a detailed look at what these involve:

1. Availability

Find out whether a particular franchise is available in your preferred location. If it isn’t, you need to move on quickly. Even if it is, determine whether there is scope to add more locations in that area in the future. The site you are looking at needs to be in an area with a sizeable population for you to consider expansion there.

2. Opportunity

Check whether the franchise business concept makes sense in your local area and market. Can you make a profit from that business, and is it sustainable. Will you be able to make profits as a franchisee? These are some questions to ask yourself from the angle of opportunity.

3. Risk Tolerance

Understand where you lie stand on the risk scale. If you are more towards the equation’s adverse side, look for franchise businesses in the mature or middle cycle. You will have more options while researching because these companies will have an established footprint in the market.

You can’t do this easily with comparatively younger franchise concepts. Contrastingly, if you aren’t opposed to risk-taking, you might want to consider a newer franchise business. This move can allow you to dominate a larger geographical area as the competition would be lesser. You will also get better attention from the franchisor, and their team will have the capacity to spend more time with you as there will be fewer franchisees in the fray.

There are many different types of franchises to consider these days, but keeping these franchise cycles in mind while making your choice helps you get started on a stronger note. Discuss your decision with someone with experience in the field after properly researching availability, opportunity and risk tolerance. This approach will increase your chances of success.

If you want any more franchising information, contact the experts at The Franchise Institute. You can call us on 1300 855 435 or fill in this contact form, and one of our experts will contact you as soon as possible to answer all your questions.

Thanks for reading,
The Franchise Institute Team
1300 855 435

Post A Comment

Leave a Reply

Your email address will not be published. Required fields are marked *