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The Marketing Challenges of Finding New Franchises

Many young brands make the mistake of taking the approach that more is better.

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The following is an excerpt from Franchise Bible: How to Buy a Franchise or Franchise Your Own , Ninth Edition, which will be released April 20 through Entrepreneur Press. Pre-order now via Amazon | Barnes & Noble | IndieBound | Bookshop.

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Anyone familiar with the franchise industry knows that one of the most coveted acquisitions for a is a new franchisee. Paramount to the success and growth of a brand, franchisees represent the foundation, adding breadth and depth to the influence and reach of the brand itself.

Often referred to as the “Golden Goose,” franchisors are in constant search of the next best franchisee candidate. Good franchisors will take steps to ensure that the new franchisee is a good fit for the brand. It is important to both the franchisee and to the brand that there is a good match. Finding these candidates, however, is often easier said than done. And many young brands make the mistake of taking the approach that “more is better” and focus on the “sale” instead of the “fit,” and they often find themselves with disenchanted franchisees who no longer want to be a part of the brand any more than the franchisor wants them to be a franchisee.

Related: The Franchisor's 10 Commandments

In short, a good franchisor will not only establish clear guidelines on the ideal candidate for their brand, but they will also control as much of the recruiting process as possible. There are two primary ways to recruit candidates for your brand:

1. Marketing and lead-generation firms. There are firms that are experienced in helping generate candidates for your brand. Like with any others method you choose, not all will be created equal. A good marketing firm should be experienced with finding candidates, should work collaboratively with your brand and your personnel and should offer you some semblance of control over the process. Like with any , this should also be data-centric, have discipline and flexibility and represent your brand properly in the marketplace. Most marketing firms will operate on a subscription basis. This has mitigated risks. If they can produce good, quality candidates, it's likely to cost you less in the long run, in comparison with the consultant commissions. However, the subscription approach usually implies you are paying as you go for marketing efforts, and depending on your sales cycle, it may take some time to recover your investment.

2. In-house systems. In the early stages of a franchisor’s development, there is probably no one more qualified to help a candidate understand the value of investing in the brand than the founder. After all, it is the passion for the product or service that the franchisee is investing in anyway. However, founders are usually busy running their business and managing the locations in some day-to-day capacity.

So, for an in-house system to work properly, the franchisor is going to need internal talent who can represent the brand with the same passion as the founder. What’s more, they will need to have both client services and sales-business acumen, and the franchisor will have to provide them with tools to properly seek out and engage candidates. These systems will likely include email efforts, calling, social media efforts like , mailing efforts and the like. The executives will be responsible for helping develop the system as well as keeping up with the candidates in their various stages of development. Regardless of the methods you choose, begin with the “fit” first. Making sure that your candidates are a good match for your culture and your brand is critical to the long-term success of your franchisees and, ultimately, your brand.

Related: The 10 Commandments of Franchise Ownership

Happy franchisees who are financially healthy will serve as good validators and will make your brand more valuable. In contrast, unhappy franchisees — or franchisees who are not financially successful — can cause long-term problems, or  worse yet, end up a failed owner. That isn’t good for the owner, and it’s a permanent detriment to the brand as it needs to be disclosed on your FDD. Find your match, and everyone wins.

Rick Grossmann

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Rick has been involved in the franchise industry since 1994. He franchised his first company and grew it to 49 locations in 19 states during the mid to late 1990s. He served as the Chief Executive Officer and primary trainer focusing on franchise owner relations and creating tools and technologies to increase franchisee success.

Rick developed and launched his second franchise organization in 2003. He led this company as the CEO and CMO growing to over 150 locations in less than three years. He developed the high tech/high touch franchise recruiting and sales system.

Both companies achieved ranking on Entrepreneur Magazine’s Franchise 500 List. During this period Rick served as a business and marketing consultant to small business and multimillion dollar enterprises. He also consulted with franchise owners and prospective franchisees, franchisors, and companies seeking to franchise around the world.

Rick is the Author of Entrepreneur Magazine's Franchise Bible series and his 9th Edition was released worldwide in April of 2021.  He also is a contributing author to Entrepreneur Magazine and other industry publications on the subject of franchising and business.

He currently heads up the Entrepreneur Franchise Advisors program, serves as an executive coach and strategist for multiple franchise clients and is the co-host of the Franchise Bible Coach Radio Podcast with Rick and Rob.