Dec

2

Wednesday

Invest in A Franchise

Congratulations!

This is one of the biggest decisions of your life – I mean that, it truly is.  Buying a franchise is a lot like getting married and you thought a long time about that didn’t you?

Well the same care and attention needs to go into choosing a franchise because essentially like when getting married what you are looking for is a long term relationship, not a short term one that ends in divorce.

Let’s look at the stages:

Attraction:  Something has attracted you to this opportunity.  It might be the industry, it might be the earning potential or it could be something hard to put your finger on.  Whatever it is you are attracted to the opportunity.  Good, because you should feel attracted towards the opportunity if it has a chance to get past the next stage….

The First Date: The first time you communicate with each other is likely to be over the phone but at some point you are going to want to meet the person.  When you look at investing in a franchise a lot of the acquisition is emotional – the first impression of the person that represents the brand that you are considering investing in is really really important.  It can make or break the relationship before it has really started because it potentially represents what you may represent in the future and the impression has to be something that attracts you to that brand.  The same is true for them too – you have to be someone they want and don’t assume that all they are after is your money – because that just isn’t true, they want new partners that can help them grow their mid-long term business.  Let’s assume the ‘First Date’ went well, you are attracted to each other and have shared sufficient information to want to meet again, so let’s look at the next stage….

Courtship: This is where you establish the relationship and start to form strong opinions of each other.  Can the franchisor give you what you need to build a new business, will they support you towards success?  The way that you form those views is through further meetings with the franchisor.  Importantly though you will also get to meet the extended ‘family’, these will be other employees of the franchisor and also existing franchisees of the system.  Remember though, not every family lives in a world of perfect harmony so don’t be surprised to hear a few gripes about the franchisor from people you get to meet – take a balanced view.  The courtship phase often lasts many weeks or even months depending on the complexity of your situation (you might be employed for example and not ready to make a decision just yet).  Once you feel really comfortable with each other you may be ready for the next stage……

Engagement: You might call this the pre-nup!  This is where you have decided that you want to be together and its time to look at the contract and the financials to make sure that you can live happily ever after once you get ‘married’.  Take your time and consult a qualified franchise lawyer on the contract as it is important to get this right as the parameters you agree now will form the backbone of your long-term relationship.  Now for the big day….

Wedding Day:  There should be a lot of elation and emotion the day you sign your contract and it should be a great moment.  Enjoy it as now the real work begins!  In some systems what comes next, or more likely what doesn’t come next is a major let-down because your ‘partner’ has gone off and started to court more people when what you want to do is build the Happy Ever After.  Let’s see how we can do this….

Living Together:  You’re married and concerned that your partner may not be paying you enough attention.  Don’t be, make sure you have good communications.  Remember why you got married, you had a shared vision of (specifically) what you could do once you were married.  You could tap into the support network, the product marketing, the system marketing and sales support.  Lots of things!  Nothing has changed and your ‘partner’ will be there for you but you have to make this work, not just them.  Be proactive, be creative, be focused – this is your life and your business so don’t look for others to blame if it is not working.  You have to make this work and I wish you every success in joining the 22,000+ other franchisees who are building a successful franchise business in the UK and who contribute over £13bn to the UK economy.

So, congratulations because you are a special person who has taken the step towards controlling your own destiny and joining the world of franchising.

 

 

Nov

19

Thursday

Franchise2

Why do franchisors fail to recruit the right number of people?

I met with a client of mine recently and it struck me whilst we reviewed their recruitment processes that a lot of franchisors do not have sufficient structure in place and fail to understand the damage that this can do to their brand.

Having worked in the recruitment industry as well as the franchise industry for over 25 years I have seen the good and the bad.  I don’t proclaim to necessarily know what makes the best process but I sure do know how to spot the bad ones and help people improve them.

It comes down to structure and process.

Treat every franchise lead as a potential customer of your business – they may have come in as a prospective franchisee but the chances of them actually becoming a franchisee is 100:1.  Pretty small odds so you might think only about the special ‘one’ but that would be a mistake.  The other 99 have shown an interest in your brand and so you must respect that – and if they are not the special one then they are at least still special and how you treat them at this stage is really important for your brand engagement – after all they may become a customer.

Here are some simple steps to a franchise recruitment process:

  1. The enquiry – treat everyone equally. They have enquired so now you must do likewise – the same day.  Contact them with some basic screening questions to determine whether you want to set up a face to face meeting with them (in person or online).  This step may be managed by your support team.  Those that do not pass the initial screening should still be added to your marketing database and they absolutely must receive a personal thank you letter or email.  Good manners cost nothing and you will be amazed at the goodwill that your brand collects based on this simple show of respect.  Expect to ‘lose’ up to 80% of your enquiries here.
  2. The initial meeting – I recommend that this is a “getting to know each other” meeting. Not a heavy sales pitch but a look to see if you have the right ‘fit’ for each other or to see if there is chemistry between you.  Of course you probe with intelligent questions but as this person is considering investing in your business take the time to get to know each other – this is the start of a long-term relationship so don’t rush this important step.
    1. If you decide not to proceed any further make sure you treat the prospect courteously – remember your brand.
  3. The pitch – this is often done at a discovery day but may also be a personal meeting. This is the time to ask the searching questions, not just about their background and financial status but what it is that drives them, why they want to run their own business, what type of person they are.  If you use behavioural profiling this is the time to review that – many franchisors recruit on gut feel and the past experience of the potential franchisee but then find out (too late) that the person is not suited to the work.  There are some simple yet highly effective tools that can prevent these mistakes (feel free to contact me and I’ll share with you what I have successfully used and still use).
    1. Use the time at this meeting to get to know the person, make sure they meet multiple members of the team and take on board the feedback from your team – consider a veto because if you do not all agree you will find that if there are problems down the track there may well be “I told you so” moments.
    2. Make sure that you impart all of the information you need to help the prospect make a reasoned decision – don’t leave them guessing about your system. Sell your vision for the business!
    3. Put in place the structure and process for follow up. For those that are rejected at this stage remember to call each person personally and share with them the reasons for your decision – it can be hard but it shows respect for the person and they’ll remember you and your brand because of it.
  4. The plan – You have asked them to invest serious preparation time in pulling together a business plan. You have probably introduced the prospect to a number of your existing franchisees to support their validation that your system is all that you have told them.  Support them through this process and elicit feedback on their plan.  Make sure you understand their timescales and what else they are dealing with.  Once their plan is ready meet them again in person to review the plan and give constructive feedback.  At this stage you should be very clear on their financial status and make sure the prospect is sufficiently funded to run the business and their lifestyle for 12 months.  If the plan is not up to scratch and/or the person is not funded correctly then do the right thing and reject them, telling them why.  Again this can be a very tough conversation but it is better to do this before things have reached a critical point and the prospect has burned a lot of cash to get nowhere – and from your perspective the brand damage to your business can be hugely significant.
  5. The contract – the final hurdle? You have come a long way now and it is always galling when you lose a prospect at this stage.  You need to be clear with your prospects at the outset that the franchise agreement is not a negotiated document between you, it is one sided in your favour.  You have to have control over your network and you need to be comfortable and confident in how you explain this.  Of course you must be prepared to explain your contract, clarifying points of concern satisfactorily but you have come this far and by now you have a degree of trust to work together in the future and if you have done this all professionally this should not be a deal breaker (always assuming that your contract is fair and ethical of course).
  6. Award the franchise – an important choice of words but this is a special moment and everyone in your organisation should feel this way as well as the prospect. This is not the sale of a franchise, it’s the start of a long term business relationship worth countless thousands of pounds way beyond your initial franchisee fee.  Celebrate what has been an arduous process for your prospect and your team to reach this magical moment!

At the end of the day this is all about having good systems and good structure in your franchise recruitment process.  You have to eliminate wasted time in driving the conclusion to what is a typical sales funnel.  You put 100 people in at stage one of the above process and it whittles down to the award of the 1 franchise at stage six.

It’s important that you understand your sales funnel, you may be better or worse than 100:1 but whatever your statistics are you need to understand those KPIs to enable you to make improvements or to spot a slowdown.

For me, if you continue to feed the funnel with good quality leads, have a strong process that is adhered to, (coupled with a good franchise system) then success will follow.

If Franchise Top 10 can help you with your process by feeding your sales funnel please do get in touch with me.

Nov

19

Thursday

Value

When I look at the franchise industry, from the inside out, why is it we undervalue the importance of franchisee marketing and try to do it all in house?  Because we know best? Why is it then that we keep doing the same things and expect different results?  And when it doesn’t happen we shrug our shoulders and blame the economy, the full employment market or something else that continues the delusion!  How many of you missed your recruitment targets this year and are looking for (or hearing) excuses?

My brother-in-law set up and runs a very successful digital marketing agency and I have seen first-hand how the level of creativity that they provide to their clients is infinitely greater than what their clients could deliver themselves – so using an agency just makes sense and most companies know that and so do it.

As a company owner or director we often focus our marketing activity on the end user – looking to evaluate their needs and appeal to them.  The way that is done nowadays has become ever more sophisticated with CRM and marketing automation tools that track customers and nurture them along the purchasing journey.  It is truly fascinating and there are lots of articles that you can read on this topic if you need further education.  The franchise industry is massive and the marketing spend of franchise systems is equally huge in attracting customers to purchase their services and products.  Many franchisors invest significantly and utilise the services of marketing agencies for both the creative and the placement of marketing in relevant media.  Using an agency is an effective use of time and resource as most franchisors do not have the expertise in this area and so it makes sense to hire the professionals to get the best ROI for their marketing spend.

You have to take control and look at the importance of franchisee marketing with a similar singular focus – yes do some of it in-house but seriously consider outsourcing the marketing aspect of this, focus your efforts on a really slick internal recruitment process and get your marketing agency to focus on filling your sales funnel for you.  Place the right resource in the right place and get the best return.

Marketing for customers and marketing for franchisees are not necessarily mutually exclusive as your B2B or B2C marketing will also provide comfort to your potential franchisees as they see you in the market and that is positive.  The life-time value (LTV) of your B2B or B2C customers is something that you will be familiar with but unless you have franchisees to service those customers that could be seriously hampered.  In speaking with franchisors I am noticing that the switched on ones understand the LTV of a franchisee and can therefore make a considered decision on what the acquisition cost of that franchisee is worth?  If your franchise fee is £20k would you pay £10k to acquire them, £15k? £25k?  It may sound crazy but if we believe that the LTV of a franchisee is in the 5-10 years of royalties that are earned, penny pinching in the acquisition stage is equally crazy!  It’s always easier for the more mature (and richer) franchisors to invest but the developing systems need to fight for franchisee talent by engaging an agency that can help them attract the right talent to their system.  Once the talent is attracted it is your job to show them why your system is right for them – that’s what you do best right?

So leave the lead acquisition to professionals and focus your attention where you can get the best return.