Just Getting Started? Sound Advice for Emerging Franchisors
Every new franchisor should look to take advantage of the goodwill, familiarity, and trust their brand has established over the course of its operations. This means tapping the existing customer base, friends and family members, and the professional networks of key members of the franchisor. Franchisees who have a previous relationship with a brand often will have great passion for that brand and a deeper understanding and appreciation of its culture, and can be more willing to take a chance on a new or emerging brand they know.
Since new franchisors will be doing a lot of OTJ learning, the first few franchisees are likely to see some of the behind-the-scenes struggles that will, hopefully, be ironed out as the franchisor gains more experience. An existing relationship between the first group of franchisees and an emerging franchisor is helpful where trust, open communication, and a benefit of the doubt will be needed.
This does not, however, mean you should award a franchise based solely on that relationship. It still is important to create a profile of what a franchisee should bring to the table to be effective in your brand, run your operations, and uphold your brand standards and culture. Although the familiarity and trust of existing relationships will provide new franchisors some leeway as they shape, test, and evolve their franchisee profile, allowing a franchisee into your system who is unqualified or not a fit, simply because of an existing relationship, is a quick path to some early franchise relations headaches.
Relationships with friends and family can become complicated very quickly when they change into professional relationships. Franchisees who have a longstanding relationship with a brand often see themselves as different than a “normal” franchisee and may expect special treatment or allowances. The initial group of franchisees in many systems often have a different experience from the franchisees who follow. They were the first to take a chance with the brand and may have entered the system before significant changes were made. However, a franchisor must always treat franchisees the same. Simply having a previous relationship with a franchisor should not in itself put a franchisee on any special plane.
1) Learn to use PR
Public relations can be crucial to the success of emerging franchisors. Founders have some of the most compelling stories to tell, which can be particularly effective in franchise sales. When choosing to join a franchise network, franchisees often make an emotional decision. A key part of that decision may be the powerful story of the franchisor’s path to building the brand, of a founder or team of founders who came together to overcome the odds and succeed where others had failed. These personal stories can help inspire an initial group of franchisees to take a chance on your brand, even without the proven track record of your more established competitors.
PR has a double value: it not only helps raise consumer awareness of your brand’s existing corporate locations, it also builds brand equity that will aid your franchise sales. As a franchisor, you’re now marketing to both audiences. PR can be an effective way to reach them both at the same time featuring different types of messaging for each.
2) Wear many hats
The management team of an emerging franchisor usually is limited to the founder and a very small team who helped build the business from the ground up. For about half of our emerging clients, that management team can be as few as two people. This can be a virtue for a franchisor needing to keep spending down. There will be a time to add members to take on specific roles (franchise sales, field support, training, etc.), but in the beginning those roles can, and should, be held by as few people as is practicable.
In the early days, it will be cheaper and more effective to elevate someone from your existing operations and teach them franchise development or field support than it is to bring in someone with experience at other brands. No one knows your brand, culture, and operations better than those who live it every day, especially the founders and initial team who undoubtedly are the most qualified to fill those roles at the outset. Also, by offering opportunities to move up within your company, you will be better able to incentivize your best employees to further buy in to your brand and become a part of its future expansion.
As prospective franchisees have become more sophisticated, they seek practical information that only someone who has worked in the brand can answer. War stories and a clear understanding of how the brand works seasonally and in different situations build the confidence that prospects require.
3) Track your data
Know where your franchise marketing dollars are going and track what methods are most effective. Make sure to include a way to track where your leads come from and where along the franchise sales process you might be losing them. By tracking your sales you will begin to understand where those sales come from so you can get the best value for your marketing dollars.
Finally, consider the growing number of suppliers that provide technology to track your franchise sales process. They are a worthwhile expense at the outset of your franchise journey. Investing in efficiency is the best way to make your franchise marketing dollars go further.
Andrew Seid is senior consultant at MSA Worldwide. Contact him at firstname.lastname@example.org or 860-523-4257.
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