Note: This post is a snippet of our 2018 Top 100 Global Franchises report. The entire report can be viewed here.
As mentioned in the report, the franchises of the Top 100 are anomalies when it comes to system size. While the average number of units for a franchise in the Top 100 is well over 5,000, 57% of franchise systems in the U.S. have 50 or fewer locations according to Franchise Grade.
However, big or small, all of these franchises have something in common—they had to survive their initial growth phase. What’s it like when you’re a new franchise just beginning the process of adding new units?
Top 100 aspirant children’s education franchise Building Kidz began franchising in 2015. At the beginning of 2017, it had 4 locations open. It ended the year with 8 open. While it doesn’t seem like a lot at first glance, that’s a 100% increase in number of units—an increase that comes with a special set of challenges. The franchise also increased its units sold by over 300% by the end of the year.
Michael A. Peterson is the Director of Franchise Development for Building Kidz. He shares with us the perspective of a franchise just starting its expansion.
What’s it like growing 100% (by number of units) in one year?
All I can say is that this is an exciting time for us. Thankfully, the growth didn’t blindside us, so we have the infrastructure in place to support all the franchisees on board and more. Everything Building Kidz does is focused on one thing: to touch the lives of 1 million children in our founder’s lifetime without compromising the quality of care for even one child. We do this using our own schools, our franchised campuses, as well as dedicating 25% of the franchisor’s profits to underprivileged children.
What has been the biggest challenge to franchising your brand? How have you overcome it?
Building Kidz is a well-known brand in Silicon Valley, with an established history of providing top-notch care to children in the area. As we began to expand into areas where the brand was unknown, of course we faced the challenges of name recognition. Thankfully, we have been able to use our 40-point marketing plan to help our franchisees raise both awareness and adoption of our philosophies before they ever open their doors.
How do you decide which areas to franchise next? Is it more corporate-driven or is it driven more by where prospects contact you from?
We are currently on a national expansion plan, so we are allowing our growth pattern primarily to be driven by where prospects contact us from. Having said that, however, for some key geographies we are using a combination of geo-targeted SEO as well as working with business coaches in the area.
What was the tipping point that let you know franchise expansion was right for Building Kidz?
As someone who has many years in the franchise industry, I had an instinct about Building Kidz from the moment I first met with the founders. I knew my instinct was correct, however, when we did our first trade show, and the booth constantly had a line in front of it, even though we hadn’t had time to develop a trade-show booth at all!
What are your expansion plans for 2018?
We have several franchisees on the cusp of opening locations, so we intend to focus on getting as many of those open for business as possible. We also have some key areas that we would like to expand into. Overall, we would like to double our national foot-print, both from a units-opened and units-sold standpoint.
More information on Building Kidz can be found here.