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Is Franchise Times A Top Source of Franchise Information? (2024)
Written by: Patrick Findaro
Last Updated by
Brenda Bagnoli: January 23, 2023
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Today, I’m gonna go through arguably the most important industry news source in the franchise industry, and that’s Franchise Times. We’re gonna go through if Franchise Times is really a top source of franchise information, as well as what we like, and honestly what I find annoying about the content and their business model as a whole. So, as a recap, at Vetted Biz, we serve prospective franchisees, franchisees. Those that are doing business in the franchise ecosystem, we don’t receive any payments from franchisors.
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Now, I can’t say the same is true with Franchise Times. It’s mostly positive news on the franchise space, which is a bit concerning. Especially in 2020 and 2021, when a lot of franchise brands really hit hard through the pandemic. So, they usually not having any negative news until the system is really having tough issues. So, even Subway, we do a quick search in Franchise Times for just the word Subway. You can see it’s mostly positive press. That’s in despite of Subway closing 6,000-plus locations over the past few years.
The Importance of Subscription-Based Media
Now, it seems like most of the access the Franchise Times, anyone can see there’s no paywall in place. The big trend in media right now is moving towards a subscription model like we have at Vetted Biz. That way you can focus on reporting the facts and really having the consumer. Which in our case, our prospective franchisees and franchisees, get the information they need. The facts they need to make an educated decision, especially when they’re thinking about investing hundreds of thousand dollars in franchises. You have to focus on the facts.
So, think about the Wall Street Journal, New York Times, Washington Post, they all have major subscription components. And are moving further and further away from relying on advertisement sales. The less you can rely on advertisers, the more you can really focus on what your findings are and how that affects the consumers. And really report the facts even if you’re gonna make some constituents upset, some companies in the ecosystem upset with those findings reporting those facts.
The issue is franchisors pay a ton of money for ads, banners, lead generation. I have to admit, after running Vetted Biz for nearly three years, we’ve been tempted at times to provide lead generation, advertising services, or franchisors. Nearly once a week, a franchisor reaches out to me on LinkedIn or through our website. Asking for advertising on our podcast, asking for lead generation services, banners. We’ve made a strategic decision. It wasn’t an easy decision not to accept money from franchisors as that would hurt the reporting and information that we share to the larger franchising community.
So, again, it’s hard to put down because the franchisors are offering so much money. In fact, if you wanna advertise on Franchise Times, they charge a really nice multiple compared to what Google Ads charges. Franchise Times is gonna cost you anywhere from $45 to $65 per 1,000 impressions served. Now, if you compare that to Google Ads, $3 to $10 per 1,000 impressions served. At Vetted Biz, we’re paying around $5 per 1000 impressions served on Google Ads, their display network. So, that puts Franchise Times at a 5x as expensive as Google Ads.
What You Need to Know About Franchise Times
The issue becomes for first-time franchise buyers. It can be difficult to navigate and cut through the fluff and have blinders on all the advertisement that they’re getting on these franchisors that are advertising on Franchise Times. So, very positive note for franchisors and multi-unit franchisees, you can really benefit from the information on Franchise Times as you already know the space, you know how to navigate what’s been really pushed, and what is sales, and what is actually… deals are happening, this person bought this franchise system, this multi-unit operator sold 100 units.
And you can get a lot of intel because Franchise Times is really reporting the mergers and acquisitions and what is happening in the franchise space, especially related to financial transactions. So, they have the best coverage of who is buying what in the franchise space. They also have a pretty comprehensive vendor directory, but my qualm with it, it’s pay to play. So to get listed, you have to pay to be on the vendor directory. We don’t charge a dime for any franchises listed on Vetted Biz. I wanna have the most complete database of franchises on Vetted Biz, and hopefully, Franchise Times can also open it up and not have to pay to be on their vendor directory.
Now, the fluff. If you’re on their email list, especially if you’re a prospective franchisee, you have to be aware of what’s going on. I received an email on the event below with the subject line, “What Makes These Franchises Successful?” And two of the franchises were uBreakiFix and Signarama. I had to ask what makes them successful because over the past 30 years for every 17 SBA loans paid in full. the primary way people are financing franchises, they have 15 charged off. So, that puts Signarama in the bottom 5% of franchises by SBA loan performance.
From 2018 to 2020, 20%-plus of Signarama franchisees have left the system. So, that includes franchise terminations, franchise non-renewal, transfer to new franchisees, or reacquired by the franchisor. As for uBreakiFix from 2018 to 2020, 50%-plus of the franchisees have left the system. The franchisor reacquired 100-plus franchise locations in 2020 alone. They had another franchise on that forum that they were hosting “What Makes These Franchises Successful?” The Black Bear Diner, which is actually quite impressive, on the other hand. Over the past three years, only three closures.
So, my question to Franchise Times, what are the criteria for creating this panel? Is it just a pay-to-play to host a webinar on any franchise? And if so, I think it’s a bit unjust to mark the title of the webinar “What Makes These Franchises Successful?”
Where your team has the data and editorial knowledge to know that uBreakiFix, Signarama. Do not have the best track record by unit closures and/or SBA loan defaults.
Another thing that we see rampant in the franchise industry are mailings that boast about how much money franchisees are making. And they only focus on a small sliver of franchisees. So, I received an email from Franchise Times about Smoothie King. And I noticed in their mailings, they consistently quote sales and EBITDA of the top 20% or top 25%. So, 20% is the average EBITDA margin for the top 25% of traditional franchise units that submitted a full complete profit and loss statement to Smoothie franchise in 2021.
You only see that the top 25% of performers are making that amazing high-profit margin. If you look at the fine print, as well as, they boast in the ad about making nearly a million dollars average gross sales. So, 20% of $907,000, that’s making about $180,000 operating in Smoothie King. Everyone’s gonna sign up for that, but it doesn’t include all that many franchises. It’s the best performers of a select group. So, ending on a positive note, Franchise Times information is well written, amazing editors, writers. They have amazing market color for the franchise industry. What the movers or shakers are doing. What software is being implemented, vendor relations. There’s a lot of good nuggets there.
Conclusion
But the issue is you need to be kind of sophisticated to navigate the site and not get caught in the hype. And if you get caught in the hype, you could invest in a franchise that has a pretty lousy track record of success. I’d be curious to hear anyone’s comments on Franchise Times, and what you use it for, as well as if there’s other franchise industry publications that you really benefit from when you’re exploring different franchise opportunities.
