Franchise Lead generation is critical to the success of growing your brand. This area of your business plan must make perfect strategic and financial sense. There are three (3) main sources of new franchise inquiries.
Live Telephone Inquiries – These candidates will call your toll-free number as a direct response inquiry from display and classified advertisements which you will place in regional and national business opportunity and industry-targeted segments in magazines and newspapers. Live inquiries enjoy a 100% contact rate but a higher cost per lead and cost per sale. You will qualify and pre-approve this candidate with a different approach than an internet or referral from a franchise consultant.
Internet Inquiries – These candidates will respond by email from advertisements which you place on franchise opportunity portals. These leads can be targeted by state and region. This email inquiry has less than a 60% contact rate and a medium cost per lead and cost per sale. Due to the fact the contact rate is substantially lower and they request up to six business opportunities, some within your industry, you will qualify and pre-approve these candidates with a different approach than a live telephone inquiry.
Franchise trade shows and referrals from your franchisees will contribute to your recruiting mix of new franchises. We have invested substantially and have utilized all forms of franchise recruiting campaigns and public relations programs with referring consultants. Each lead generating source requires a meticulous and detailed training process to ensure your franchise sales department contributes 30% profit to your overall composition of revenue.
Over a 20 year period, we utilized all forms of advertising and lead sources, which resulted in over 50,000 new and unique franchise candidate inquiries. Your franchise recruiting process must understand the regional buying culture and expectations broken down by state. For example, the candidates in upstate Rochester, New York, purchase a franchise much differently than lower Manhattan, New York. It is equally true with candidates north of Bakersfield, California, purchasing a franchise much differently than people in southern California. Within each of the 50 states, there is an individual style and regional culture of cooperative, decisive and egotistical franchise buyers. For every 100 franchise inquiries:
(66% of all franchise inquiries will not become a value match for your franchise system.)
(Of the 33 remaining pre-qualified candidates, one must become a new franchisee.)
These high-level characteristics also are uniquely combined with the individual demographics of education, age, net worth, and transferable skills. You will work with male/female, husband/wife, partners and investors, within the range of 20 to 60 plus years of age. Each will introduce you to their deepest desire for independence and what life circumstance is causing them to want to own their own business. Surprisingly, more often than not, your candidate will be running from a personal or career problem to open a business. Learning how to comfortably diagnose your candidates’ issues will protect your marketing budget and accelerate your franchise sales cycle by weeks, which helps you hit the ground running with a profitable franchise development department.
I remember all too clearly my first year as a franchisor. My passion and enthusiasm for my concept was my biggest asset. Unfortunately, it did not sell franchises! I was trained in sales that customers purchase from people they trust and are enthusiastic about what they sell. Ask yourself, “Would you write a check for a $30,000.00 franchise fee and invest up to $150,000.00 because you like the founder’s enthusiasm?” Probably not…
My clients would always answer my telephone calls and we would have an engaging conversation. They would never tell me “no”. I attended widely-advertised and respected franchise sales recruitment seminars and was sure this would fix the problem. I learned more about state and federal regulation and the legal aspects of selling a franchise. I left feeling certain that this money was well spent. However, based on what I have learned 20 years later, there is an absolute void in the real recruiting techniques, telephone scripts, processes and systems that make franchise sales. I continued to waste thousands in marketing dollars, incurred long 4-12 month sales cycles, and unproductive conversations with my clients. I have since learned that our industry is highly-specialized and process-orientated from our first contact with our client to the signing date of a franchise agreement through training and supporting our franchisees. This structured system and process protects the consistency and uniformity of franchisees operating in a multi-state environment. We will provide you with proven and tested prospecting systems and processes to recruit highly-qualified franchisees. Telephone role playing with proven scripts will reduce your learning curve up to 50% and shorten the duration of your sales cycles to 4-6 weeks. Your franchise sales department will operate on a high level of efficiency and professionalism to protect your marketing budget and costs per sale, thus increasing profitability. You will be certified to make one (1) franchise sale per thirty-three (33) emotionally interested and financially qualified candidates. This training certification prior to starting your franchise company is the difference between selling five (5) franchises your first year versus twenty (20) franchises. Without a commitment to learning how to award, grant and sell franchises, your franchise system will have no forward momentum. Your existing franchisees are counting on you to deliver a growing, stable and profitable brand.
We have performed over 1,000 face-to-face regional and corporate Discovery Days. The Discovery Day itinerary for most franchisors is intended to be a “value matching” day with an exploratory agenda. For less than 10% of franchisors, a Discovery Day will become a conformational day in which your candidates will actually execute final franchise agreements and pay their initial franchise fees. Corporate Discovery Days can be an enormous waste of your human resources. In fact, if you perform two (2) per week and eight (8) per month, your corporate focus shifts to your “internal sales survival” versus “consistent external support” to your franchisees. Performing exploratory Discovery Days reduces your sales conversion percentage to 50% of candidates who actually become new franchisees. Our franchise recruiting and sales training process will increase your conversion rate up to 90% of your face-to-face Discovery Days. This is achieved based on our proven and tested philosophy and substance of each step within your qualifying process. You will be certified to increase your sales conversion rates above 50% of all performed Discovery Days. This sales training certification prior to starting your franchise company is the difference between awarding five (5) franchises your first year versus twenty (20) franchises. More importantly, you are not wasting the time and money of your corporate staff. The cumulative effect of brief presentations by each of your corporate staff members on Discovery Day virtually shuts down the franchisee support mindset of the day.
If you attend any franchise sales recruitment seminars, your peers will tell you “time kills deals”. The word “deal” should be eliminated as a part of your franchise sales culture. The word “deal” implies selling when franchising implies partnering. Your franchise candidates start to feel like they are just leads when they are in fact putting a high level of trust in you and investing their hard-earned life savings to become a franchise partner. There is a franchise recruiting culture which can promote a quality, fast, efficient and profitable recruiting sales process of new franchisees. However, you are not selling a franchise; you are awarding and granting a license for the use of your operating system for the term of the franchise agreement. This culture is managed with work-flow accountability and real time reporting on each candidate and where they are at in your franchise approval process. You will quickly learn that some candidates require you to hold their hand and others need a little prodding. Initially, you are pre-qualifying your candidate as they are comparing your franchise against other franchise opportunities. Our key reports track each lead through each step of our process and tie back to reporting profitable lead sources and the lowest cost per sale.
Everything is constantly changing daily in your franchise system! These life circumstances are completely outside of your control and mean the difference between a franchise location which closes versus fails. It is more common to experience with your franchisees; cyclical business results, family, marriage, financial, health, and career changes on a daily basis. Franchisees will also simply lose their interest in the business to no fault of either party. It is critically important to keep a pulse on these early indicators and react to the needs of your franchisees to supportively assist them in exiting the business. Self-employment is not right for everybody and they can become productive in other areas which may be more satisfying. We have developed a proprietary resale system which transfers this business to a new franchisee in the shortest period of time, with the approval and cooperation of the franchisee. The marketing and sales process is uniquely configured to sell a profitable business or simply the opportunity for profit. In the event you are unable to transfer the franchisee’s business to a new owner, we will teach you the process of how to terminate your franchisee’s retail lease, transfer the physical aspects of the business, and ensure your franchisee receives proper accounting guidance to qualify them for appropriate IRS refunds which may be available through carry-back/forward business losses.
Franchisees who leave your system for personal circumstances are often referred to as business failures, however these circumstances may have had very little to do with business failure. Every successful franchisor has a more successful resale department which can be internally performed by your franchise sales executive or outsourced to franchise sales resale experts. McDonalds and Subway have very sophisticated resale departments to assist franchisees who are leaving the franchise system.
Contrary to popular belief, small business credit and capital is abundantly available. If you listen to the news and your franchise peers, you would think bank credit is forever locked. Knowing how to assist your franchisees in the funding stage is both a science and an art. Your goal for each new franchisee is to open their business safely and creatively under budget. It is also important to factor in costs which are unforeseen.
Each decision your franchisee makes in their respective start-up phase will be over budget, unless you accept an active role in a weekly track-to-open session. We have developed a step-by-step support system which keeps key decisions closely aligned with their unique Composition of Net Worth and within four (4) major objectives:
How many new franchisees in any franchise system can even begin to accomplish these objectives if there is not a support system to help them achieve these goals? Ultimately, your franchisees reserve the right to final purchases, however preventing mistakes is the key to opening safely and creatively under budget. Our expertise in the SBA funding process is unparalleled at a local level for a new franchisee and follows certified loan packaging techniques while interviewing three banks simultaneously. This prevents turndowns and wasted time when a franchisee is ready to sign the franchise agreement. Additionally, we teach the tax advantages of 401-K loans and partial IRA liquidations. We have secured relationships with small and big ticket equipment leasing companies and non-secured business lines of credit vehicles. This high performance track-to-open system will prevent you from losing as many as five (5) potential franchise sales per year.
Franchise Marketing and Sales Recruitment. FGP will consult with you on how to develop your franchise sales brochure, website design and E-Brochure and other Franchise Sales recruitment tools.
Franchise Marketing. FGP will consult with you to develop an “internal” media mix optimization program to ensure a high level of live, Internet, customer referrals, and unique franchise inquiries.
Franchise Consultant Referrals. FGP will consult with you to develop an “external” outsourced sales strategy utilizing referrals from 9 franchise-consulting firms (900 consultants) in our database and 1500 business brokerage offices nationwide. This consulting will include how to invest your resources and in what companies which will yield the highest number of referred franchise candidates. And what percentages to pay of your initial franchise fees to each company in accordance with our past experience with these firms. It is essential to avoid consultants who are mavericks in nature and place their clients with companies who pay higher commissions. This consulting practice can undermine your profitability and recruit the wrong qualifications of potential franchisees. FGP will consult with you on how to train and compensate your inside franchise sales executives on these types of referred franchise prospects while increasing profit.
Franchise Sales. FGP will provide the founder a high-level, 3-day franchise sales certification on the technical aspects of “how to sell a franchise”. This training will be conducted at our corporate office. A “start-up franchisor” cannot be profitable without the founder knowing each technical, legal and operational aspect of how to sell a franchise. We teach a perfect franchise approval process which is conformational not exploratory and that will substantially increase your lead to application ratio, application to Discovery Day ratio and Discovery Day to closing ratio. Our sales recruitment process has been refined over a 24-year period. Each micro-step has a theme, a blind spot and a measureable result. (Our philosophy is that a perfect golf swing keeps the ball in the middle of the fairway. Any technical hitch in any step of the process causes a franchisor to be unprofitable).
Beware: It is common for founders to substantially invest in a Franchise Disclosure Document and operations manuals, sell few franchises and not remain in business. If a study was completed on how many founders built their system and set sail, it is my guess that up to 80% were never trained on the techniques of a fine-tuned marketing and sales system and how to create the "intensity" of forward momentum.