Many of us have been in the franchise business longer than... well, a long time. At Franchise System Builders we have had the fortunate experience to work with many companies and to become intimately involved with their franchise offering, franchise development processes, and resulting successful operations.
Earlier this year, as we worked with our clients to update their disclosures for 2015, our review of several FDDs again brought to our attention a selling opportunity overlooked for years by franchise development teams. This opportunity runs through your website, collateral materials, phone conferences, discovery day meetings, and even your FDD. It is an opportunity to highlight a critical expertise of your brand and establish another point of differentiation. It also provides you the opportunity to present precisely what the vast majority of candidates want and need of their franchisor partner.
The one core competency every candidate wants and needs from their franchisor partner is marketing expertise; or what I warmly refer to as the ability to "put butts in the seats." Candidates can buy equipment and inventory and rent real property, but success is not made of equipment alone. No matter how we phrase it, candidates buy the brand's ability to fill the seats they just bought. To sell the inventory they now own, they need the market research, test marketing, marketing agencies, and the years of experience the franchise company can provide.
It seems obvious we should wave our own marketing flag, doesn't it? But let's look at how we sell our marketing expertise.
Most commonly, we speak about local store marketing managers who help the franchisee plan and execute programs. We talk about annual planners and provide a library of materials approved for use. Some concepts manage local co-ops, regional or national ad buys, and placements. We show great ads. We talk about social media campaigns, a digital presence, and brag about our retail website. Then we dedicate one or two hours of a multi-week training curriculum to marketing. And in far too many FDDs marketing training does not appear at all!
We parade a host of marketing tactics in front of franchise candidates when what they really want to know is "How do you know what is the most effective marketing strategy?" Our typical answer is, "We know through experience." But that old answer is not good enough. Tell them how you know. Put it front and center. "We know more about our customers than most in this industry, and that knowledge is the basis of why we do what we do and why we expect you to do what we do. Best of all, it works. Let me show you why..."
Nothing is more exciting to a group of franchise candidates than market research that provides intimate knowledge of the behavior of their future customers. Tell them what you know, how you know it, and why it works. Nothing builds more leadership credits for the franchisor than raw marketing knowledge.
More important, a focused presentation of your brand's marketing expertise expands your candidate's horizons. As we have all experienced, the majority of people say "marketing" when they actually mean either advertising or sales. Marketing spans all aspects of your brand. It is the basis for pricing and promotion structure, decor, uniforms, vehicles, service, menu, and on and on. Demonstrating the strong marketing foundations on which key strategies are built creates even more leadership credits.
Best of all, a pinpoint focus on presenting your brand's marketing expertise provides the opportunity to talk about resounding success. The history of a store that turned around with an infusion of new marketing strategies (not budget) builds candidate confidence in the brand's abilities. The development of a market that now excels with a targeted marketing effort, when only random execution previously occurred, builds confidence in your support staff. Of course, to have these types of discussions you must have prepared the appropriate Item 19 disclosures far in advance. (No one ever said that good franchise development marketing does not take planning and preparation.)
Simply stated, franchise candidates buy marketing. They may say they buy your success rate, AUV, gross margin contribution, or lifestyle proposition. But what they are really saying is, "I buy your marketing expertise that generates the AUV, reduces the ramp-up curve, and ultimately provides the lifestyle I seek."
So openly discuss what you know about putting butts in their seats and you will sell more units. And double-check the number of hours devoted to marketing training in Item 11 for two reasons: first, no one can learn to effectively market anything in one to two hours; and second, it gives you the opportunity to tell the story of your brand's marketing expertise all over again during the FDD review.
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