Franchise Best Practices from a Successful Franchisee: What You Need to Know

Franchise Best Practices from a Successful Franchisee: What You Need to Know

With four independent franchised Orangetheory Fitness locations under his belt, Mark Molina has learned a thing or two about owning and operating franchises over the past seven years. 

From finding the right markets, to identifying the right customers, there are many factors to consider before, during, and after investing in a franchise. 

Here are three best practices Molina has learned that can help anyone interested in owning or selling franchises. 

Tip 1: Do Your Homework Before Investing 

Corporate franchisors cannot make any representations about the possible rate of return on an investment. While this protects them, it also makes evaluating a franchise opportunity more challenging for franchisees considering opening a location. 

Molina recommends conducting your own due diligence. Before opening his first franchised Orangetheory Fitness location, he talked to two dozen other franchise owners, visited successful sites, tested out the gyms, and used this knowledge to inform his decision. He also said that, if it’s available, you should evaluate market and trade area data for insights about your potential territories. 

Franchisors can help franchisees streamline the evaluation process by providing access to market and trade area information, ultimately enabling faster decisions. 

Tip 2: Don’t Stop Using Data After the Initial Investment

Once you’ve made the initial investment, data can help support the operational side of your location as well as help you find new territories or markets. Insights from competitive data, demographic and psychographic consumer data, and economic data are all useful for navigating a changing economy and sizing up opportunities. 

For example, when exploring additional sites for Orangetheory Fitness franchises, Molina was able to leverage site scoring and demographic reporting offered by the franchisor to better understand his current trade areas and assess prospective trade areas.  

“It’s like getting the answers to a test,” Molina said. “You still have to write in the right answers and execute, but the more information you have on anything like that, the better off you are.”

Tip 3: Market Locally 

Larger franchise brands often have big state-wide, regional, or even national advertising campaigns, and that type of marketing tends to work well for boosting brand awareness for the organization as a whole. But Molina found that smaller-scale local marketing was critical for getting people through the doors in his locations specifically.  

“My first studio was the first one in Connecticut,” he said. “There were parts of the country where Orangetheory had a lot of traction, but no one in Connecticut had heard of it. So, getting the name out and proving to people that this was not a passing ship in the night was important.”

Molina did that by developing relationships with businesses and restaurants in his community. He also had success using social media, email campaigns, and geo-targeting—all of which can be supported by demographic and psychographic data. Despite this, Molina discovered that word of mouth was the best advertisement around. 

“Once the Orangetheory train left the station, it gained momentum all on its own,” he said. “If you get a good reputation and you manage to keep it, you’re off to the races.”

Franchisors seeking to differentiate their brands can focus on growing strong brand awareness and supporting franchisees with local market insights to inform their marketing efforts. This type of support can make the investment even more attractive to potential franchisees. 

The Bottom Line 

When it comes to opening a franchise location, it’s important to trust your gut. But ultimately, bolstering your decisions with data throughout every phase of the process is the smartest way to move forward.  

“Intelligence and data are everything,” he said. “Whether you’re making an investment, operating a business, or buying a car, the more you know from resources that you trust, the more informed your decision is going to be.”

If your franchise is looking to grow, check out our tips for taking franchise territory mapping and management to the next level.