Franchise Recruitment

Franchisee validation is driven by three factors. The first is unit-level economics. Are franchisees' financial returns meeting their expectations?

The second factor is the quality of the franchisors' training, support, and performance management systems. Would franchisees say the value of the tools and support they receive is greater than or equal to the royalty dollars invested?

The third factor is the quality of the franchisor-franchisee interpersonal relationships. Do franchisees, employees, and leadership of the franchisor trust each other and work toward crafting mutually profitable campaigns, offers, and solutions? Do franchisees feel they are heard and understood? Does information routinely flow up and down the organization or just funnel down from on high? Would franchisees say they are informed about issues important to them? Would they say they feel like an integral part of a team or more like the low man on the totem pole?

The way franchisees would answer these questions speaks volumes about the culture of the franchise organization...

Audit your advertising and increase results

What you don't know, you can't measure. And what you can't measure, you can't improve! Successful recruitment programs invest in marketing intelligence and monitoring tools to 1) determine their most productive selling sources; 2) create compelling, direct-response advertising for each media source selected; and 3) stay ahead of or in step with the competition.

Good news for you smart execs! Many franchise companies still don't track their marketing performance - which provides competitive advantages for those intelligent franchisors who do successfully monitor, measure, and modify their lead generation programs. By knowing where you are and where you want to go, you build the shortest road to get there...

Franchise Performance Group has been studying and creating franchise sales "tipping points" since 2002. In this e-book we identify and explain the 10 Keys to Creating a Tipping Point. While these 10 keys apply equally to all franchise brands, each franchisor will need to craft their own tactics for each key. Even if you succeed in all 10 areas at the same time, when exactly your company will reach a tipping point is unpredictable. But I can tell you, based on my experience, it will happen. Conversely, if you fail in one or more of these 10 keys, regardless of how many franchises you are selling now, your development program runs the risk of coming to a grinding halt.

Strong 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 future financial successes of future franchisees...

This is the first of a three-part series on how to optimize your franchisee conventions. In this first part, we examine how to get more franchisees to attend your convention. In the second, we will address how to get the maximum benefit from your conventions. Finally, in the third part, we will look at how you can extend the life of your conventions and ensure you derive the maximum benefit from them.

No singular event is as powerful as your convention in terms of communicating with your franchisees. It is the single most effective form of franchisor-franchisee communication. According to Katrina Mitchell, CEO of Speak!, "A key investment for most franchise systems is their annual franchise convention. With careful planning and a focus on what you want your franchisees to take away from the experience, your annual meeting can have a tremendously positive effect on a franchisee's productivity, profitability, and passion for the brand...

Note: For part 1, Discovering the Power of Public Relations, click here. For part 2, Hiring a PR Agency, click here.

As a bootstrap franchisor, there certainly are ways you can gain public attention through your own personal efforts. Ask some franchise PR firms for general advice on how to stir up some publicity on your "franks 'n' beans" budget. They can often help out with suggestions. Their valuable direction may help accelerate your initial PR successes and avoid costly mistakes, so you can use their services in the not-too-distant future! Let's take a look at three franchisors who triggered extraordinary media attention through their personal PR efforts.

1. Margaret McEntire, founder of Candy Bouquet International, was a walking news story...

Jersey Mike's has developed a recruitment system that's strong on speed, efficiency, and good communication, says Brian Sommers, vice president of franchise development for the Manasquan, N.J.-based franchisor.

"Most of our prospects are already well informed and have done some due diligence. They've already been into our stores and have checked out the website," he says. "As soon as they fill out our first form, our prequalification representative contacts them. Our rule of thumb is that the contact takes place in under 24 hours." In most cases, he says, it's within one to three hours.

In addition to working with prospects to complete the requisite applications and financials, the sales rep also begins screening each person for compatibility with the Jersey Mike's culture...

Twenty years ago I first witnessed the magic of great PR. Dan Dorfman, a renowned investment advisor, wrote an article praising our small business-to-business franchise, which had 100-plus owners at the time. Immediately afterward, our phones were ringing off the hook for three weeks! His syndicated column, which ran in 300 newspapers throughout the U.S., named us one of the "top 10 best franchise investments in America." Eleven sales later, I sat down and realized what had happened - and what can happen for franchisors with excellent PR reaching the right buyer audience at the right time. Simply put, PR sells franchises. Since then, I have discovered these general truths about using public relations as a recruitment tool.

With the proliferation of more sophisticated social media, PR, web, and blogging tools available today, franchisors have a golden opportunity to tell their story to a captive pool of franchise candidates who are hungry for such information. During a Franchise Update Leadership & Development Conference only a few years ago, you could count on one hand the number of franchisees successfully recruited through franchisors' implementation of a social media strategy.

In contrast, Showhomes, then an emerging franchisor specializing in decorating and staging vacant, upscale residential properties for quick resale, stood out as an exception. Showhomes attributed $300,000 in franchise fee revenue in 2009 to their social media outreach efforts...

We asked three franchise sales executives what they are doing to improve the speed and effectiveness of their responses to prospects evaluating their system. This is what two of them had to say. For the third response (from Steve Cox, vice president of franchise development at i9 Sports), watch for the next issue of Franchise Update magazine (Q2, due out in early May).

Jim C. Brown
Vice President, Franchise Development
Comfort Keepers/CK Franchising
Over the past several years, the in-home care sector of franchising has become extremely popular, with more new concepts being launched every year. In addition to more competition, these new brands bring more visibility to the sector. Our strategy and sales system have evolved since Comfort Keepers began franchising in 1999...

Franchise shows were the champions of recruitment during the 1980s and early 1990s. Franchisors effectively sold owners throughout the U.S. by "working the circuit" 40 weeks a year. Buyers flocked to these events, excited to meet franchise executives face-to-face and get the direct scoop about their opportunities. These convenient showcases provided entrepreneurs with a great personal experience to learn, evaluate, and buy a franchise business in their own backyard. For franchisors, these events were an ideal recruitment tool for building target markets.

Then, a combination of events shattered the marketplace and threw trade show selling into a tailspin for several years: over-saturation of franchise shows and the discovery of the Internet for investigating franchise opportunities...

In the previous three issues of FUSR, we published a high-level overview of the 2012 Annual Franchise Development Report (AFDR), followed by selections of highlights from the report: first, recruitment budgets, recruitment spending, Internet spending, top sales producers, top Internet sales producers, and online alternative resources; and last month social media, closing ratios, franchise sales performance, and data about franchisors exceeding goals.

In this final article, we provide more findings from the report, which drew on detailed responses from 110 franchisors representing 109,936 total units (79,254 franchised and 30,682 company-owned).

For many franchisors, the traditional advertising vehicles - portals, print advertising, PR, and broker networks - do not appear to be working as effectively as they were five years ago. We predicted the slow decline of these once-proven vehicles in our white paper, "The Future of Lead Generation: 6 Big Changes Which Will Alter Franchising Forever," available as a free download. Since we've already written a detailed paper on this topic, we won't rehash what we still believe to be highly relevant information. Instead, we will focus only on additional insights we've had since the paper was published a few years ago.

For those who have read the paper, you may remember we took issue with franchise portals for not doing more to provide franchisors with better educated, more informed, and buyer ready leads...

In the previous two issues of FUSR, we published (1) a high-level overview of the 2012 Annual Franchise Development Report (AFDR), followed by (2) a selection of highlights from the report. In this third article, we provide more findings from the report, which drew on detailed responses from 110 franchisors representing 109,936 total units (79,254 franchised and 30,682 company-owned).

The three previous issues of the Franchise Update Sales Report (1) introduced the topic of lead generation success; (2) covered Step 1 and the beginning of Step 2 in successful lead generation; and (3) showed the importance of knowing what your franchise buyers want. This fourth installment builds on those ideas, showing how you can "wow" your candidates and the importance of how you present your concept to them.

Billboard the "wow" factors your buyers want
Promote your top attractions in every way you can: in your sales collateral, presentations, public relations, and by educating staff employees. These "wow" factors, or benefits, will drive qualified candidates to join your system.

Survey your top producers to find out what it was about the business that attracted them...

Zig Ziglar once said, "People don't buy drills, they buy holes."

Carrying his logic into franchising, franchisees don't really invest in franchise opportunities; they invest in the future they are designing for themselves and their families. They buy the next chapter of their lives. Whether you are selling multi-million-dollar hotel investments or home-based businesses with low entry costs, franchise candidates are investing in a perceived solution to a personal problem.

Most franchise candidates invest in franchises for reasons that have nothing to do with business. They only appear business-oriented to the mediocre or underperforming franchise recruiter who is not skilled enough or doesn't care enough to ask the necessary probing questions to uncover what is really driving the candidate...

Step 1: Define your market of qualified prospects

Who is your ideal franchise buyer?
Let's begin with knowing your market. Producing quality prospects starts with understanding who your franchise candidate is. Marketing efforts will be disastrous if you don't! It's like being in a boxing match blindfolded with the lights out, with no clear target to punch. You'll be working with the wrong prospects and wasting a bundle of money and time. Worse yet, you'll award franchises to unqualified owners, a painful mistake not easy to resolve.

For superior marketing, craft your franchisee success profile first, before you even think about how to promote your franchise opportunity. If you ever lose sight of your buyer, you can no longer grow to the greatness you aspire...

Try a few of these selling tips to sharpen your process and accelerate your inquiry-to-close cycle. These techniques are speeding deals for franchisors. See what makes sense for your development approach, and you can enjoy more closes in less time.

"What are you doing to create a compelling, response-driven recruitment website for your brand?"

That's what we asked two experts from longtime successful brands - Rob Goggins at Great Clips, and Brian Spindel at Postnet. Here's what they had to say.


Rob Goggins, Vice President of Franchise Development, Great Clips
The Great Clips franchise development website was originally designed to self-educate prospective franchisees. We included a detailed map with territory availability, franchisee testimonial videos, and an SEO-enhanced blog. We focused on aligning brand elements with our salon and consumer site to maintain brand consistency while creating a look and feel appropriate for our different demographics...

The Annual Franchise Development Report (AFDR) from Franchise Update Media Group is a comprehensive research guide to sales and lead generation performance in franchise recruitment. The report drills down to industry categories, investment levels, and recruitment budgets; provides marketing costs information; reports the top-producing sales and lead sources; reveals performance evaluations of franchise websites and follow-up to prospect inquiries; and analyzes current and historical industry growth trends.

The data and analysis in this 150-page report have been helping franchisors for years to benchmark their sales performance, accelerate system growth, increase selling performance, and make smarter, more cost-effective advertising and marketing decisions...

Many franchisors lust for experienced multi-unit franchisees to buy their concepts. These seasoned business builders manage and operate their own units (not to be confused with area developers, who sell and support franchisees in defined territories). Multi-unit operators have the management expertise, infrastructure, and track record for building successful franchise businesses. The risks, training, and operational support required from corporate are often less costly, and market expansion significantly accelerated. What does it take to capture a growing multi-unit or multi-brand owner successfully operating 15 to 100 franchise locations? When you look around and see that Burger King, Choice Hotels, Dunkin' Donuts, SuperCuts, and Qdoba are doing it, the question is "Why can't I?"

Multi-unit franchisees discussing business sound a lot like stockbrokers strategizing with clients about their portfolios...