Unit-level economics. This single key is the greatest predictor of a franchisor's future success! All enduring franchise brands are built on a foundation of both the consistent successes of its existing franchisees and almost certain financial successes of future franchisees.
As you read this, thousands of potential franchisees are online searching for a way to make a better life for themselves and their families. They may not contact you until they first satisfy three basic questions every candidate has:
If, through your online presence, franchise candidates can predict that your model will satisfy these three concerns, you are much closer to your goal of filling your franchise sales pipeline with highly engaged and buyer-ready franchise candidates. Remember, these candidates often reach these conclusions through "guesstimation" before they talk to you.
So if candidates can't quickly and almost effortlessly determine that your franchise model satisfies these three concerns, they'll quickly dismiss your opportunity before you have the chance to share the rest of your story. Most won't ever fill out a lead form or call, and you'll never realize how close you might have been to a sale.
Consider your financial returns as your ante to the franchise poker game. If you don't offer franchisees consistently strong returns, you don't have the ante, and therefore you don't have a seat at the table.
Carrying this logic forward, Item 19 and FPRs are more important than ever. Make this information as public and as accessible as possible. In your PR materials, on your franchise opportunity website, and on the social media front (and under the scrutiny of your attorney), circulate stories highlighting your franchisees' financial successes.
Keep in mind there is no universal measure for financial success. The financial results your opportunity predictably produces must meet or exceed the expectations of your target franchisees. However, in the present economy many franchise candidates seem to have higher financial demands than in the past. These include:
Your business needs to be producing acceptable returns for the vast majority of franchisees according to the franchisees' definition of "acceptable." Also, your success stories need to be heard. Franchisors and franchisees need to aggressively share their stories.
So dismiss the results of the best and the worst, and focus on the middle. If these franchisees are not producing acceptable results according to your typical candidate's definition of "acceptable," your growth will halt. If the franchisee is achieving a desirable outcome, you are well positioned for growth!
Joe Mathews is a founding partner of Franchise Performance Group, which specializes in franchisee recruitment, sales, and performance. This article is from his free, downloadable e-book, The Franchise Sales Tipping Point: 10 Keys to Creating a Franchise Sales Breakthrough. Contact him at 860-567-3099 or email@example.com.
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