Social Media: A New Frontier in Franchise Development?

Franchise Sales Execs are Warming to the Possibility

Social media platforms are now emerging as franchise recruitment tools. Granted, it's still early in the adoption process and only time will tell how successful these new channels are in generating leads and franchise sales.

Still, many social media tools offer instantaneous, interactive, and effective mechanisms for reaching franchise prospects. Seen in this light, they can offer additional or enhanced opportunities at a minimal cost. While every recruitment tool should be examined for its effectiveness and ROI, early adopters view social media as part of a fluid, emerging strategy, and many believe it just may have more than a little merit.

People like BJ Emerson, Tasti D-Lite's social technology officer; Deb Evans, president and CEO of Computer Explorers; and Gary Occhiogrosso, chief development officer for Trufoods (Wall St. Deli, Pudgie's Famous Chicken, Arthur Treacher's Fish & Chips, and Ritter's Frozen Custard) are employing social media as part of their media mix in franchise sales and development. They all like what they're seeing and plan to continue exploring social media as a franchise recruitment tool.

The soft sell

The use of social media as a franchise recruitment tool is less about a traditional aggressive, big numbers sales approach and more about simple interactions coupled with a subtle, guiding approach.

At Computer Explorers, says Evans, "Social media is a complementary tool that helps us build brand awareness through dissemination of information." This idea, of adding and integrating a new recruitment tool, seems to be the sentiment of many franchise development executives today (see sidebar ).

Evans says that she and the other six members of the corporate team all spend time with various social media tools such as Facebook, Twitter, and her favorite, LinkedIn. She's a fervent blogger and uses these writings to build brand awareness. "I write a regular piece for Franchise Business Review. One of the ideas is that someone who's a potential franchisee might read that."

At Trufoods, says Occhiogrosso, "Social media provides one more tool for us to recruit with. There's no one marketing tool that is a magic bullet for lead generation and recruitment, but using as many tools as you have at your disposal is just smart," he says.

He likes to compare social media to a cocktail party. "I use LinkedIn as a way to engage in conversation with others in the franchise arena. There's nothing pushy about it. You're simply building a rapport, a dialogue, creating awareness of your brand and what you offer. The interested prospects then have the opportunity to follow up with you."

The strategy creates points of contact and interaction and allows Occhiogrosso a chance to size up the interested candidates. It's imperative, he says, to stay active in ongoing social media channels. He likes to troll the waters of LinkedIn, stay active in discussions, and respond when others ask questions.

At Tasti D-Lite, Emerson has been at the forefront of social media experimentation for some time. Now that franchise development is turning to these tools, he says he's seeing some positives.

"We connect with fans that have moved to different parts of the country, and they help spread the word to their friends and followers," he says. Conversations related to new openings or promotions are then seen by those not yet familiar with the brand. As a result, many hear about Tasti D-Lite for the first time through this virtual word of mouth. "Some of those may include individuals interested in franchise ownership," he says.

This interactive nature of the social media culture is quite possibly its most singular and challenging characteristic--and its most exploitable from a franchise development standpoint.

"As more prospects start participating in these online communities, the opportunity for brands to connect and create touch points is only going to increase," says Emerson. "Smart brands will start incorporating social into everything they do, online and offline."

Getting results

Using social media effectively as a franchise development tool requires a new kind of strategy and approach, says Nick Powills, CEO of No Limit Media Consulting in Decatur, Ga. His firm represents more than 30 franchise brands, advising them on how to develop recruitment strategies that employ social media tools.

"I think it begins with a basic understanding of how communications works, expectations and limitations," he says. "From there you need to understand how social media works--and doesn't work." While different platforms and markets present unique challenges and opportunities, chances are there are some social media strategies that--when combined with more traditional methods--will benefit a franchisor's recruiting efforts.

"One of the key concepts in franchise development is to be aware that in many cases, communication with consumers invariably leads to communication with prospects," he says. For Powills, there's no question that social media is helping recruit new franchisees. "Our franchise clients are getting and closing deals as a result of social media," he says. "Social media creates brand awareness in the marketplace and it gives you another component to add to your media basket," he says.

One such client is We Do Lines, a start-up franchisor seeking both new and established parking lot line stripers. "We proactively reach out to independents and educate them on the power of having a brand behind them. This has brought prospects to discovery days, and this process has led to new franchisees," he says.

Wireless Zone is another of his clients testing the waters of social media. "At Wireless Zone, we get the most activity out of any of our clients with inquiries. This is partly because we have separated out franchise development social media and consumer social media," he says, and has led to deals for the franchisor. (Another factor simply could be that a brand like Wireless Zone is more likely to attract online inquiries than a parking lot line painting concept.)

Powills believes that many are skeptical about social media for franchise development, but he says if you believe in paying for advertising on portals, perhaps you need to think a little more outside the box--or at least more like a prospective franchisee. "Of the franchisees we have worked with in the last year, 90 percent have used Google for due diligence, and a vast majority used social media as a reference point," says Powills.

He says the three most effective social media tools he has witnessed to date in franchise recruiting are Facebook, blogging, and LinkedIn.

"I think probably Facebook is number one. It works in so many ways, not just in building awareness, but in its ability to drive interested parties back to the corporate franchise information sites," he says. "Beyond that, it works in helping a franchise determine growing or undeveloped markets that have high numbers of fans. This can help you decide where to look for franchise operators and expand."

Blogging is next on his list. He says it's an active way to push information out. And because social media content is now being scooped up by Internet search engines, you can talk about franchising topics and other general business strategies knowing that it will circulate and be found by prospects.

Third, Powills sees LinkedIn as a strong recruitment tool. "This is where professionals are. It offers a very proactive venue for finding experienced franchisees that have operated other brands and might be looking to expand," he says.

Into the PR mix!

Social media has become such a significant part of franchising that Chicago-based Fishman Public Relations, which represents 90 franchise companies, has created its own social media department to work alongside its pre-existing teams.

"Social media tools offer PR professionals so many more ways to promote a franchise brand," says Debra Vilchis, chief operating officer at Fishman. "It seems like everybody wants to use these tools, but many don't have a strategy in place."

To help boost franchise sales for franchisor clients like TeaGschwendner and Tropical Smoothie Café, Fishman has positioned their social media accounts to add validity to the franchise, integrating social media strategies with traditional PR efforts so they complement each other.

"The stronger their social media presence is, the more enticing the opportunity is to a prospective franchise owner," says Vilchis. "It's similar to how a potential franchisee may be more likely to buy a franchise with a strong national advertising campaign than a franchise with no national advertising strategy." Thus, Fishman seeks to make franchising information readily available on the social networks as a way for prospective franchisees to find information about the client's brand.

In addition to the franchise leads obtained through social media campaigns, says Vilchis, Fishman supplies franchise sales teams with data on markets where social media users show strong interest for a brand. For example, TeaGschwendner has fielded several inquiries from brand enthusiasts asking when they can expect to see a location in their market. Franchise sales teams can use that information to show prospective franchisees an established demand in a market to help close the deal.

"That's why it's so important for all of your marketing efforts to be integrated, the more traditional complemented by the emerging social media tools," says Vilchis. As on a website, franchise inquiry forms should be just one click away from any social media tool a brand employs. "Prospects are using social media networks to research brands," says Vilchis, so it's important to be monitoring the conversations people are having in the social media platforms.

And as with choosing current outlets for your media buys, Vilchis says it's important to figure out which social media tools are best for your brand and target candidates. "Social media networks are like channels," she says. "You need to keep the channels active and open to keep people coming back."

Facebook, for example, is a good tool for active and engaging dialogue, she says. "This is where you can make things fun and engaging, conduct contests, and create a viral power." Franchise information should undoubtedly be a part of any franchisor's Facebook page. Make it as easy as possible for an interested prospect to find out more about your company, says Vilchis.

Echoing a point made by Powills, she says, "Franchisors need to realize that search engines are picking up social media now and will direct a searcher to a franchise's social media sites." As a result, more people--including those researching franchise brands--are expecting companies to be involved in social media. They want to know what people are saying about your brand.

Today's franchise prospects are smart and looking online for information about franchises before they make contact, agress Evans. "One of the places they are looking is on social media sites," she says. "Be active in your social media and know what's being said about you... your prospects do."

Spreading the word

For many franchise companies, customers are hot prospects as franchisee candidates. "By attracting customers we feel we're attracting potential franchisees," says Evans. "For us the approach has been more of a shotgun style that seeks broad and general brand awareness." With that in mind, it's easy to see why all media efforts should be smartly integrated.

Beyond LinkedIn, Facebook, and Twitter, Evans says, Computer Explorers also has turned to YouTube. "A local television station in Florida did a great piece on one of our operators there. We got the piece and uploaded it to our own YouTube channel," she says. "We direct prospects to view that piece and other informative videos, like interviews with some of our franchisees."

At Tasti D-Lite, Emerson says, the company's online visibility has increased through interactions and public conversations on various social media channels. "Providing a strong presence on these channels gives us potential touch points with prospects interested in owning a Tasti D-Lite," he says. In one case, Tasti D-Lite targeted their existing Facebook fan base with franchise offering messaging and saw an immediate response of inquiries, which he says were quickly redirected through their development website.

Measuring effectiveness

While efforts are under way on many fronts to follow up with social leads, it still is early in the process to draw definitive conclusions about the effectiveness of the various platforms in terms of leads and sales. The benefits, already clear to many early adopters, are still more anecdotal than measurable, much as things stood in the early years of the Internet and web. Early returns, however, are encouraging.

"Similar to other franchise development tools, social media doesn't generate leads overnight," says Vilchis. "However, the process immediately improves online brand awareness." Over time, she says, a strong social media presence results in increased consumer awareness and franchise leads, which clearly benefits all aspects of the system.

Occhiogrosso says Trufoods is getting results that can be measured in simple ROI terms. "We're currently negotiating franchise agreements with three prospects that we can identify as coming to us exclusively through social media channels."

However, here's the rub: franchisors have been notoriously poor at tracking results and measuring the effectiveness of traditional media recruiting efforts. To make social media tools work most effectively, this must change.

"The key to social media ROI is a well-designed campaign where results can be tracked and measured," says Emerson. "Impressions, clicks, and RFI submissions are just a few of the items that can be measured related to a given lead source or ad campaign."

"As a measure of ROI, you simply must be measuring and tracking your social media efforts," says Vilchis. "You may be selling franchises through social media channels and not even realize it!"

Fishman has been busy creating tools its clients can use to measure their social media endeavors and decide what's working best. "We work with our clients to help them use the proper social media tools, and now we're helping them track and measure their results in a calculated and tangible way," says Vilchis.

Stepping back from the details, says Vilchis, effective use of social media in franchise development is a threefold process. "First, invest your best people and adequate resources into your strategic efforts. Next, tie together your social media and traditional efforts. And finally, measure your results."

Sounds straightforward enough, but like many other marketing strategies, the devil's in the details.

A Tasti Strategy

For many new to "Web 2.0," social media is a blur of online sites, pages, blogs, fans, and tweets. Yet, franchisors constantly looking for new ways to find prospects are willing to try anything with potential. We asked Tasti D-Lite's social technology officer, BJ Emerson how his company's progressively minded recruiting had been using the various tools. Here's what he told us:

• Twitter -- Our @tastifranchise twitter account (http://twitter.com/tastifranchise) is dedicated to sharing information on our development efforts, new location openings, and is a good resource for the latest information for those interested in our franchise program.
• Facebook -- Our main page at http://facebook.com/tastidlite serves our end customers, but we frequently get questions about moving in to new areas. We can then reach out with some messaging related to franchise development, which others can see as well. Targeted Facebook ads have also been used with favorable results. Area developers also maintain Facebook pages to connect with customers and franchise prospects.
• LinkedIn -- Our vice president of franchise development, Nikki Sells, uses LinkedIn to connect with prospects on a regular basis.
• Blogs -- She also writes periodically on "Nikki's Notes," which is part of our dedicated franchise development website, http://tastifranchise.com. Our main Tasti D-Lite blog will bring awareness to our franchise offering periodically as well.
• YouTube -- We maintain a private Google video channel for sharing our videos with prospects. This allows them to log in and see videos that are not available publicly.

And the Survey Says...

Franchise Update Media Group recently conducted a survey of social media usage by franchisors that are actively recruiting franchisees. Questions dealt with both social media and consumer-oriented marketing efforts and social media and franchise recruitment.

Of the 75 respondents, about half (48%) were in services, a quarter (23%) in food, 17 percent in retail food, and 9 percent in retail non-food.

Nearly half (47%) indicated they were using social media as a part of their franchise recruitment efforts. Facebook was the top franchise recruitment tool with 62 percent of those surveyed saying they used it for recruiting. That was followed by LinkedIn (48%), Twitter (44%), and YouTube (32%).

The responses--both statistical and open-ended (see sidebar for comments)--indicate that the use of social media as a franchise recruitment technique is still relatively young--at least in terms of producing directly measurable results: only 5 percent of respondents said they had sold a franchise through social media channels in the past 12 months. However, 17 percent said they saw social media as becoming a successful franchise recruitment tool during the next year, while 28 percent said it would be a valid recruitment tool in the next two years.

Socially Speaking

One of the questions in the recent Franchise Update Media Group social media usage survey asked respondents if they felt social media is a "must" for franchise recruitment programs. We've selected some representative comments.

"It is the wave we all need to get in on, as things will progress and change. Having your name in front of the main customer base is imperative, and being available to those interested is crucial. The more this segment increases in use and morphs in how to use, the laggers will fall behind all the more quickly." -- Eva Crosland, manager franchising, Gymboree Play Programs

"Yes, it provides brand awareness and increases visibility on the Internet where everyone seems to be searching for info these days. It also shows the consumer that you are up with the times." -- Alex Roberts, vice president franchise development, Service Brands International

"Once you create a Facebook following where fans begin commenting on your brand, then potential candidates can use those comments when researching a brand. So while it won't be a direct correlation between social media and a franchise sale, it will help in their discovery process." -- Holly Ryan, franchising development assistant, Bruegger's

"It is definitely a part of the marketing mix for franchise recruitment. You get the eyes of a different type of prospect that may not be using the traditional franchise portals when looking for opportunities." -- Randy Hawthorne, director of franchise development, Firespring

"Over time it will become more significant to recruitment. The significance to recruiting will depend on the demographics of your franchisee prospect. The more your prospects use social media, the more relevant your use will be to them. The highest value today is in building your brand awareness. This, in turn, helps support your recruitment." -- Troy Bader, chief development and legal officer, American Dairy Queen

"More and more, we are getting used to this communication tool, and just like word of mouth, what could be better than a candidate who is interested because they were intrigued through the positive dialogue of their friends/acquaintances on social media." -- Jennifer Ostroff, vice president development and operations, Carpet Network

"I think that franchisors should have a presence in social media as it is a tool/channel that individuals turn to for research and validation. Serving as an information source for the 'online community' is part of moving the brand forward." -- Sherri Wilmoth, director, marketing, Comfort Keepers

Social Media Tidbits

• Facebook has more than 450 million users worldwide.
• Facebook is the second most-visited site in the U.S., behind only google.com.
• Twitter has more than 100 million users worldwide.
• Twitter users, in total, send an average of 55 million tweets a day.
• LinkedIn has more than 65 million members in 200-plus countries and territories.
• YouTube users upload 20 hours of video every minute.