Franchise Growth in the New Millennium

You’re a franchisor that wants to grow.  You’ve got a good concept, a solid training program, supportive staff, effective marketing and all the other components that you need to help new franchisees become a success.  So why aren’t you meeting your growth goals?

It is amazing how many franchisors develop a wonderful franchise system and then seem to assume that prospective franchisees are going to bang on the door asking to join up.  You’re going to need a better system than this to meet your goals.

An effective development system has three critical components.  First, you must have a solicitation plan in place to attract the interest of prospective franchisees.  Second, you must have a communication strategy with effective “tools” to get your message to these prospects on a favorable basis.  Third, you need competent and responsive staff that will oversee this communication process consistent with your company’s values and goals. 

Solicitation Plan

The secret to any solicitation plan is to generate enough prospective franchisees, at an acceptable cost, to realize the goals you have set in terms of new franchisees recruited.  The following list includes the most common sources and notes about the relative strengths and weaknesses of each.

1. Referred Leads.  These are typically the most effective and least expensive leads that a franchisor can produce for prospective franchisees.  The source can be existing franchisees, vendors, employees, friends and relatives or anyone else who knows and appreciates your business opportunity.
2. In-Store Brochure.  This source takes advantage of the locations you already have to reach people who are usually pretty impressed with your business, i.e. your existing customers.  Let your customers know you’re a franchise!  A simple counter display with a trifold brochure can produce many high quality leads at a very low cost.
3. The Internet.  This has developed into one of the most prolific and low cost sources of leads in franchising.  The biggest secret about using the internet is to get the word out on your site – print your URL on everything and use it constantly.  Plan on setting up a screening process to sort the wheat from the chaff fairly rapidly or you’ll choke on the chaff. 
4. Direct Solicitation Leads.  These are the leads you produce from advertising, direct mail, trade shows, telemarketing and the like.  These sources are great because all you have to do is spend lots of money to turn this tap on.  The problem is that there is very little water left in this well.  These approaches may have worked effectively in some other century but expect this to be your most expensive and least effective lead source in the new millennium.
5. Independent Referral Networks.  These are networks of consultants that solicit, pre-qualify, educate, and then refer leads to franchisors who’s businesses have the characteristics the prospects are looking for.  These networks have the advantage of having a guaranteed cost that you only pay when you actually complete the recruitment of a new franchisee (try to get that with the Wall Street Journal).  The quality of the pre-screened leads they refer to you can be higher than any other source, including referrals.  The only drawback is that the fees can seem very steep, even though you only pay for results.

Communication Strategy and Tools

Now that you have some leads, what do you do with them?  Here’s a hint: rapidly determine which prospects actually have some potential to be buyers and spend most of your time with them.  Both you and the prospect want to find out as quickly as possible if a match exists and, if it doesn’t, you both want to move on.

You need to know if the prospect has the money, skills and temperament to be successful in your system.  The prospect wants to know if the lifestyle and work characteristics of a successful franchisee in your business would appeal to them. 

Most prospects are unorganized and so you also need to introduce a structure for the investigation process.  Your communication tools need to have a strong call to action component that tells the prospect exactly what to do next to proceed with the investigation. 

There are three street-smart pieces of advice that you can use to help make you more effective in this area.  First, if you want to see examples of effective communication strategies, study the materials and processes being used by franchisors that are already growing rapidly.  Second, remember that even a poor video is a much stronger communication tool than a great brochure.  Finally, set up a separate web site that is specifically designed for recruiting new franchisees and use this site address in all your promotional efforts.

Competent and Responsive Staff

One of the worst kept secrets in franchising is the appalling lack of responsiveness of most franchisors to a request for information from a prospective franchisee.  How’s your company doing?  Do not assume that your company is the exception to this rule. 

Test your process to see what is really taking place.  Ask some friends to play prospect and request information about your franchise via phone, mail and the internet and see what happens.  You’ll find out a lot in a hurry.

One of the greatest truths of any sales or recruiting system is that people communicate their interest through their actions.  If you have a prospect that appears fabulous but never seems to follow through on commitments to perform, they are telling you they’re not interested.  The same thing is being communicated to a prospect when the franchisor representative fails to perform by responding in a professional and timely manner.

Conclusion

A final valuable strategy is to constantly monitor and adapt the system you’re using to increase its effectiveness.  Take advantage of opportunities to network with other successful development executives at industry forums.  Compare what you’re doing to other rapidly growing franchises to see if you can generate new ideas and approaches from what others have developed.  If you continue to learn and grow, you can have success that lasts to the next millennium.