Big Fish, Small Pond

Big Fish, Small Pond

 
 

There is a feeding frenzy in the franchise world right now as many large, multi-unit, multi-concept owners look to strengthen their position within their respective brands by snatching up smaller operators. While others are looking to balance their portfolios by investing in emerging concepts, sometimes stepping outside of their comfort zone to do so.

 

So, what is a better play? It of course depends on the brands in question, but suffice to say that the marketplace and consumers’ tastes are changing and evolving at a pace never seen before. Some of the most iconic national brands are falling out of favor, fast food is struggling, even fine dining is taking a hit.

 

The answer is to find a brand you are really passionate about…that other people are passionate about, that is getting some press for the right reasons. Another Broken Egg Cafe® happens to be in a very hot category that has shown no signs of slowing down. Fine Casual Breakfast, Brunch & Lunch has been consistently growing for almost 10 years. There are few other categories that are realizing this same degree of success, and many of these brands are considered emerging concepts.

 

Emerging concepts often times are the absolute best extension of your portfolio. Most of the same diligence principles apply to emerging concepts as they do to large, tenured brands. ROI, quality of management, quality of systems, alignment of core values, franchisee satisfaction, consistency of growth, commitment to support and training, and the financial ability to maintain that growth being among the most important.  Then of course you have to evaluate the personal side of the equation —are you passionate about the product? Can you replicate the success? Can you be a leader in the system? Is it a logical, non-competitive addition to your portfolio?

Smaller brands do not necessarily mean less sophistication, I know of several guys that were heavily vested in the burger, taco and chicken businesses respectively and invested in a little emerging concept called Panera Bread, and I can say undoubtedly,  they have done just fine.  Remember too, that often times with larger concepts, you are truly just a number on a spreadsheet. With a smaller growing franchise, you are much more likely to be valued, your business valued, and you can participate more directly in your own success. So why not take a break from being a little fish in a big pond and become a really big fish in a small pond.

 
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