Smaller Markets May Mean More Success for Franchise Owners

One national franchisor recently made an unexpected and surprising discovery when new franchises were launched in small markets instead of the usual larger metro markets. These franchises all got their businesses started faster, hit their goal numbers quicker and did nearly 60 percent more in revenue in their first half year of operation than larger metro market franchises did.  Upon further study, the franchisor discovered three reasons for this trend. 

Making Community Connections

One franchisee deliberately chose a small market thirty miles from Nashville, Tennessee because he felt he would have an easier time making a useful impact right away within a small market rather than a major one. He was right. His franchise quickly became established and well-known in that community.

Businesses such as elderly care franchises are usually able to become quickly established within their local communities as they are, by their very nature, people- and service-oriented. In smaller markets, they become fixtures in the town by establishing contacts with referral sources and easily making community connections which serve the business well.

Reduced Competition

The fact that smaller markets see faster success times for their franchises is not just a matter of their connections in the community. It is also due to the reduced competition they face in their market. Another contributing factor is that existing competitors seem more willing to work with each other.  A new franchise's top referral source may be a competitor who is unable to meet client demands.  Sometimes another competitor refers business to a new franchise because they are transitioning out of their business.

Availability of Human Resources

Although the national economy is improving, there are still many people searching for work. Franchises located in smaller markets find that hiring employees is easier, particularly for caregiver businesses. Small markets have a solid available workforce from which to hire the dozens of caregivers needed to staff their franchise. 

Franchisors have had so much success with establishing fast-growing franchises in small markets that this trend can no longer be ignored.  Senior care franchises are perfect candidates for experiencing similar start-up success in small markets as they are community service-oriented businesses at heart.  If you are planning to buy a home care franchise, plan for success by setting up shop in a smaller market.