A New Pipeline: MUMBO is the word

By: Paul Wilbur | 2,827 Reads | 13 Shares

Featured in: Franchise Update Magazine: Issue 4, 2024

%3Cp%3EFor+a+variety+of+reasons%2C+new+recruitment+is+down+for+most+brands.+According+to+the+Annual+Franchise+Development+Report+%28AFDR%29%2C+the+cost+per+lead+is+approaching+%24300+each.+In+response%2C+innovative+franchisors+are+targeting+existing+multi-unit+and+multi-brand+operators.+Existing+franchisees+provide+a+database+to+work+from%2C+which+is+better+than+waiting+for+good+prospects+to+come+to+them.+But+the+strategy+for+being+successful+with+these+sophisticated+operators+is+different+from+dealing+with+new+franchisees.%3C%2Fp%3E%0D%0A%3Cp%3EMulti-unit+operators+and+especially+multi-unit%2C+multi-brand+operators+%28MUMBOs%29+can+be+crucial+for+the+rapid+expansion+of+your+system.+These+operators+possess+the+infrastructure+and+experience+necessary+to+scale+efficiently+and+effectively.+Brands+like+Crumbl+and+7+Brew+Drive-thru+Coffee+achieved+100+operating+units+within+three+years%2C+showing+the+benefits+of+aligning+with+capable+franchisees.%26nbsp%3B%3C%2Fp%3E%0D%0A%3Cp%3EA+number+of+successful+franchisees+aren%26rsquo%3Bt+sticking+within+familiar+industries.+Many+are+diversifying%2C+owning+operations+across+food%2C+healthcare%2C+automotive%2C+and+retail+services.+For+example%2C+a+Dunkin%26rsquo%3B+franchisee+might+own+coffee+shops+as+well+as+healthcare+centers+and+schools%2C+reflecting+a+sophisticated+and+diversified+business+model.+A+practice+usually+reserved+for+large+investment+groups+is+becoming+common+among+franchisees+with+large+or+small+portfolios.%3C%2Fp%3E%0D%0A%3Cp%3EThe+2023+data+on+franchise+growth+underscores+how+size+matters.+Brands+with+more+than+100+units+average+40+openings+annually+while+the+highest+performers%2C+such+as+The+Joint+and+Unleashed+Brands%2C+open+more+than+110+units+each+year.+This+trend+highlights+the+importance+of+speed+in+capturing+market+share+before+competitors+emerge.+Service+brands+selling+territories+may+grow+faster+than+those+needing+physical+sites%2C+putting+pressure+on+companies+to+act+swiftly.%3C%2Fp%3E%0D%0A%3Cp%3EAdditionally%2C+4%2C635+franchise+agreements+have+been+signed+but+the+businesses+have+not+yet+opened.+This+backlog+creates+opportunities+for+franchisors+to+develop+innovative+ways+to+attract+and+onboard+franchisees+capable+of+sustainable+scaling.%3C%2Fp%3E%0D%0A%3Cp%3ERecruiting+from+among+these+franchisees+requires+a+different+approach+than+from+single-unit+or+single-brand+franchisees.+Successful+franchisors+increasingly+shift+to+direct+outreach+strategies%2C+using+personalized+communication+to+connect+with+franchisees+from+other+systems.+The+goal+is+to+understand+franchisees%26rsquo%3B+challenges+and+provide+tailored+solutions%2C+using+buzzwords+like+%26ldquo%3Blow+inventory%26rdquo%3B+to+capture+attention.+Access+to+email%2C+phone%2C+and+LinkedIn+helps+to+overcome+the+challenge+of+connecting+with+operators+who+are+not+always+in+the+store.%26nbsp%3B%3C%2Fp%3E%0D%0A%3Cp%3EFranchise+sales+teams+must+adapt+their+messaging+based+on+franchisee+size.+A+one-size-fits-all+approach+will+not+be+successful.+Smaller+operators+need+different+strategies+than+large-scale+owners%2C+who+manage+multiple+brands+and+often+move+between+industries.+Building+meaningful+relationships+and+sharing+relevant+market+insights+help+franchisors+position+themselves+as+trusted+partners.%26nbsp%3B%3C%2Fp%3E%0D%0A%3Cp%3EThese+franchisees+are+looking+for+more+than+just+a+good+brand+story.+Sales+teams+need+to+provide+much+more+data+about+their+system+and+about+the+market+than+they+would+for+more+traditional+franchisees.+Franchisors+must+ensure+they+have+the+necessary+infrastructure%2C+such+as+credit+reports+and+validation+tools%2C+to+support+growth+objectives.+They+need+to+show+that+they+are+making+technology+investments%2C+creating+comprehensive+marketing+programs%2C+and+building+good+vendor+partnerships.%26nbsp%3B%3C%2Fp%3E%0D%0A%3Cp%3EThe+development+cycle+is+also+different.+Despite+impressive+growth%2C+many+franchise+development+efforts+experience+slow+starts+or+delays.+Companies+like+The+Joint+have+seen+strong+results+in+later+quarters%2C+emphasizing+the+need+for+persistence+and+planning.+Franchise+development+teams+are+also+seeing+increased+interest+from+financial+firms+and+private+equity%2C+which+traditionally+had+less+involvement+in+franchising.+These+investors+now+offer+capital+directly+to+franchisees%2C+eliminating+intermediaries%2C+accelerating+growth%2C+and+reducing+complexity.%3C%2Fp%3E%0D%0A%3Cp%3EThe+new+franchise+development+pipeline+requires+targeting+sophisticated+operators%2C+leveraging+industry+insights%2C+and+using+strategic+outreach+to+build+lasting+relationships.+It%26rsquo%3Bs+important+to+have+good+data%2C+a+thoughtful+approach%2C+and+support+from+the+system.+In+the+ever-evolving+franchising+world%2C+those+who+master+these+strategies+will+lead+the+way+toward+exponential+growth.%3C%2Fp%3E%0D%0A%3Cp%3E%3Cem%3EAs+COO+of+FRANdata%2C+%3Cstrong%3EPaul+Wilbur%3C%2Fstrong%3E+is+instrumental+in+building+the+research+and+consulting+framework+at+FRANdata.+He+plays+an+integral+role+in+the+strategic+development+of+FRANdata%26rsquo%3Bs+suite+of+franchise+solutions.+Nearly+a+20-year+veteran+at+the+company%2C+he+is+the+franchise+business+model+expert+and+plays+a+key+role+in+fostering+strategic+advisory+relationships+with+some+of+FRANdata%26rsquo%3Bs+biggest+clients.%3C%2Fem%3E%3C%2Fp%3E

Published: March 2nd, 2025