For more than a decade now, has been carefully monitoring the radar screen, gathering information on franchise lead generation and sales.
The FTC's new Franchise Rule "permits a franchisor to provide information about the actual or potential financial performance of its franchise and/or franchisor-owned outlets." Does this mean it is game-on for providing financial performance representations (FPRs, formerly known as earnings claims)?
Unfortunately, many franchisors flounder in direct-response recruitment advertising. Typically, their development efforts focus on improving their sales and media sources, with minimal attention paid to increasing ad performance.
Performing a financial analysis of your existing units, for disclosure to franchise candidates in Item 19 of your FDD, could be one of the most important decisions you make for your concept
With the Amended FTC Rule mandatory as of July 1, Franchise Update asked franchisors in different industries, and of varying size and maturity, for their thoughts on the pros and cons of using Item 19 of their FDD as a sales tool. Short answer: great idea, and a real competitive edge—as long as the brand is doing well and you keep it legal. The devil, as usual, is in the details.
When Bill McPherson was growing up in the San Fernando Valley, he dreamed of being a professional basketball player. He was good enough to get a scholarship to the University of California at Irvine.
In June, FRANdata published an e-newsletter titled, "It's Time To Start Helping Franchisees To Get Loans." Darrell Johnson, the research firm's CEO, wrote: "Franchisors must increase their attention to helping franchisees obtain needed capital. Since lenders make decisions based on perceived estimates of risk, then you must help them assess your brand's franchisor and system risk."
"As a brand, people know Denny's," says Doug Wong, Denny's director of franchise development at the iconic, 56-year-old American breakfast franchise. "But they don't know who we are today." That goes for customers as well as potential Denny's franchisees.
Let there be no misunderstanding: financial performance representations (formerly referred to as "earnings claims" and referred to below as "FPRs") are powerful tools in the franchise sales process.
Rupert M. Barkoff
In today's uncertain economy, sales pros gain the edge by moving into their prospect's world. They probe, read, adapt, and outsell their competition by fully understanding and responding to how their candidates think and behave. Here are selling insights that may help increase your recruiting success.
Franchise Update Magazine
How Are You Toughing It Out In Your Industry/Category During These Lean Economic Times?
Barb Moran & Scott Haner
The Area Developer 2008 Multi-Unit Franchise Conference in Scottsdale earlier this year offered a vibrant kaleidoscope of franchise veterans gathered to share best practices. During the conference I had several discussions with franchisors that had used area representatives and area developers as an expansion strategy with varying degrees of success.