Franchise Tip #9: When considering which franchise is best for you, be sure to keep in mind seasonal fluctuations in sales. Ask your franchisor’s marketing department what strategies are in place to offset seasonal slowdowns.
Some franchisees are so preoccupied with getting a store opened that they fail to address such things as seasonal sales, which can be both positive and negative. Many franchisors take advantage of seasonal changes and annual holidays to introduce special promotions or products that find appeal among customers during a certain time of year. For example, during fall months you’re likely to see more pumpkin- and apple-flavored items on a restaurant menu and Christmas brings a bounty of peppermint-flavored drinks and desserts.
Seasonal changes in sales might be primarily determined by the product, especially in food service. Frozen yogurt might be perceived as a summer treat, for example, while things like hot soup or beverages might seem more appealing during the winter. But a unit’s location can also impact seasonal sales, which is something to keep in mind during site selection.
Teriyaki Madness franchisee Dean Clarino cautions others to examine the pros and the cons carefully before signing an agreement, including those things that most people might not consider. Weather can affect a business, particularly in areas subject to snow days during the winter. Franchisees could experience a drastic drop in sales — sometimes for several consecutive days — if people are house-bound.
If they’re contemplating opening an outlet in a college town, franchisees should have a dependable strategy for maintaining sales during those periods when school is not in session, such as holiday vacations, spring breaks, and summer, Clarino said. He also encourages them to find out about future development projects, such as planned shopping centers, that could impact sales positively by providing more traffic, or negatively by generating new competition in the coming years.
“These are things that are hard to find out and this is where a franchise helps you see the things you might not see,” Clarino said.
Menchie’s frozen yogurt has been successful in capturing customers in the dead of winter, according to Pennsylvania franchisee Richard Ryan.
One of the most successful promotions he has participated in so far has been the observance of National Frozen Yogurt Day on Feb. 6. Ryan’s store gave away free, 6 oz. cups of frozen yogurt to customers who brought in a coupon that was available when they went to the Menchie’s Facebook page.
“In the middle of winter, it was geared toward getting frozen yogurt back on the radar screen,” Ryan said. “It was the largest number of guests that we’ve had since we opened.”
Meanwhile, other franchisors depend on creating several revenue streams to help offset seasonal demand for some of its products. Frozen yogurt brands such as sweetFrog, Menchie’s, and 16 Handles realize the importance of store merchandise as both a marketing tool and an additional revenue stream for franchisees.
16 Handles is also positioning itself as a frozen dessert brand, not just frozen yogurt. CEO Solomon Choi said the very first franchisee suggested increasing sales of signature cakes, frozen yogurt sandwiches, cupcakes, and other novelties, which may have appeal year-round. The company invested in equipment such as reach-in freezers for its stores and in designing customized cakes. The company promotes the treats and also loads $5 on loyalty Rewards Cards so that customers can come in and enjoy a free treat on their birthdays with several friends.
Investors will want to explore all of the possible revenue streams to make the most of their business throughout the year.