The Strong Case for Market Penetration

Larry Manning was a franchisee in Texas. He was a good businessman in most respects and considered a potential star by the franchisor. 

Larry's many talents included being an excellent pilot. He flew at every opportunity, even flying to destinations more suited to driving. 

Over several years Larry developed more than a dozen franchised restaurant locations in Texas. Everything went well for awhile. Then the restaurant business became more competitive. His restaurant group collapsed and the bank repossessed his plane. 

One error caused Larry Manning's failure. Even though he had twelve restaurants, they were spread over seven Texas communities. That's fine for a pilot on a pleasure trip, but not for an entrepreneur trying to make a living. 

The successful franchises will develop dominance in their geographic areas. Market penetration requires a concentration of locations within a defined ADI marketing area, allowing the creation of maximum consumer awareness and operating efficiency. 

Few philosophies of success are as important to the franchising community as market penetration. It's amazing that so many franchisors have led franchisees down the road of ruin by neither  practicing nor understanding the role of market penetration in success. 

The value of penetrating one's market is shown by its impact on two increasingly important overhead components-management and media. 

Think big when you start. That may lead you to open your franchise in a market that accommodates growth. View your new business as a cluster of multiple locations under the protection of a single umbrella. Under that umbrella is your management team and all the advertising mediums you will use. Thus, the team and the media are able to cover your entire cluster of locations effectively. 

Larry Manning would likely be financially healthy today if he had been less interested in being a hot-shot pilot and more interested in pursuing dominance in one or more select markets. 

Management and media–two arenas where the battle for the consumer's business will take place. Organize your future to fight the battle efficiently.