06 February 2024 |
S8 E3: When a Fad Turns into Failure: How to Defeat the Franchise Hype Cycle, with Dru Capenito
By Adam Ryan
Everyone wants to be the next Crumbl. But let’s face it—not every new and hot franchise can be the next Crumbl. Fads aren’t always bad. But sometimes they can spell failure. So how can you protect yourself against becoming the next franchise fad failure?
The Wolf chats with friend of the podcast and franchise consultant, Dru Carpenito about the franchise hype cycle and how to avoid the pitfalls of investing in oversaturated franchise markets.
What are the risks and rewards of investing in trending franchise brands? Is it worth the gamble or are the growing pains too much to overcome? Dru explains why finding the right operator is crucial and dissects the impact that copycat franchises can have on your business.
And later, the Wolf and Dru delve into the role of private equity in franchising, discussing the growing prominence of brokers and franchise sales organizations. Learn why paying due diligence when evaluating franchise opportunities is key, and how to spot companies who may not be forthright with their financial disclosures.
00:00:00 – The Franchise Hype Cycle: Oversaturation
00:02:33 – The Risk of Copycats in Franchising
00:09:57 – Navigating the Risks of Franchising
00:20:40 – Franchisees Need More Capital for Success
00:22:54 – Understanding Franchise Metrics: Key Takeaways
00:25:31 – The Rise of Franchise Fee Inflation
00:29:38 – The Reality of Franchising: No Passive Investment
00:35:20 – Finding Success in Home Service Franchises
00:42:03 – The Math Behind Home Services
00:47:21 – Culver’s: A Responsible Approach to Franchising
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