A few suggestions (start local!)

> I am in the process of planning a computer sales business, for people who
> have less-than-ideal credit. It involves payment plans tailored to
> individual needs.

An excellent idea!

> I have started on a business plan, more specifically,a competitive
> analysis, and have listed a number of key competitive avantages I would
> have over other similar businesses. However there is a relatively new
> national franchise business that does exactly what I do, and even has all
> the competitive "niches" (e.g. free in-home set-up, warranty
> work, etc.) that I had planned for, plus they will beat any price.

However -- the people with less than ideal credit often don't have access to the Internet or to computers. Therefore they're not likely to find these competitors. Very few of your target market may be computer savvy.

> How can I compete against them?

They're not targeting local or if they are, it's a very broad target.

> What other niche strategies can I use to position my self away from their
> services?

I haven't noticed them advertising to college students (well, not at UNT Denton, they weren't) and that would be a very good warm market. Colleges that cater to the working person going back for a degree (as opposed to the youth being supported by mom and pop) will have people in urgent need of machines or better machines and who may need payment plans WITHOUT digging into the credit card.

You can also cater to what I call the "micro churches"; small churches (often in shopping centers) who need and appreciate computer resources but who do not have a congregation large enough to support their own IT specialist and the latest machine on the market. Cold calls and flyers specifically mentioning church usage would attract these buyers.

Military bases are another place where people are dependable but may not have a lot of money on hand. The military and military families (check your local VFW post... network there....) can be another market.