The Marketing Challenges of Finding New Franchises
Many young brands make the mistake of taking the approach that more is better.
The following is an excerpt from Franchise Bible: How to Buy a Franchise or Franchise Your Own Business, Ninth Edition, which will be released April 20 through Entrepreneur Press. Pre-order now via Amazon | Barnes & Noble | IndieBound | Bookshop.
Anyone familiar with the franchise industry knows that one of the most coveted acquisitions for a brand 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 management personnel and should offer you some semblance of control over the process. Like with any marketing strategy, 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 LinkedIn, 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.
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.
Entrepreneur Editors' Picks
Online Scams Are More Sophisticated Than Ever. Here's How to Shop Safely on Black Friday and Cyber Monday, According to a Cyber Intelligence Expert.
This Guy Saved Barbie From Cultural Extinction. He Did It by Asking One Big Question.
The Top 5 Hot Franchise Categories for 2023, According to One Industry Expert
Why Can't We Resist Black Friday and Cyber Monday? A Behavioral Economist Explains the Psychological Forces That Make Sales Irresistible.
I Couldn't Sleep. I Obsessed Over My Failures. Then I Found the Weirdest Cure.
This Pitch Scored a $250,000 Investment — But It Almost Didn't Happen
Employees Were Demanded to Go Home. Here's How We Invite Them to Come Back.