You devote your passion and work to franchising your firm after years of success…
You employ a franchise attorney and development team, and you work on your franchise disclosure document, systems, and operations manual. You establish your new franchise, enter the franchise industry, and are ready to expand your brand in a matter of months.
So, what happens after that?
Many people experience exhilaration, followed by disappointment and franchise weariness, at least for the first two years. Attracting and recruiting quality franchisee candidates is not as simple as others have made it out to be, and you may feel lost and in need of a plan to clarify a successful brand roadmap.
If you’re feeling this way, you’re not alone, and you’re probably making one or more of these three mistakes:
1. You’re Relying Too Much on Outside Vendors
Sure, you’ll need a competent support staff – lawyers, franchise PR, accounting, marketing, and so on – but you’ll also need to immerse yourself in the franchise business, study franchise sales and development, and hold your partners accountable if you want to succeed.
Don’t just assume that the advice you’re receiving is correct. Investigate and assess what works for other franchisors and how to offer franchises to the right candidate in a strategic and cost-effective manner. Choosing the cheapest vendor may prove to be the most costly decision you can make, as well as a sluggish road to nowhere. That doesn’t imply you should waste money, but it does mean you should arm yourself with the knowledge necessary to assess what you need to spend and with whom you should spend it.
2. You Haven’t Developed Your Brand Story and Digital Validation
The most common mistake made by start-up and developing companies in the first two years of franchising is that they immediately begin spending money on digital ads, portals, and other marketing channels without first defining and positioning their brand story.
This error occurs for a variety of reasons, the most important of which is that it is difficult! Consider the following questions and see if you can provide a clear and succinct response to each:
- (a) What makes your franchise brand special and what sets you apart from the competition?
- (a) How will purchasing your franchise benefit your franchisees?
- (c) What makes your franchise one of the most appealing right now?
If your answers concentrate around industry norms like “we support you,” “our training…,” “proven methods…,” or generic statements about the whole business, such as “the industry had 1 Billion dollars in sales,” you’re telling the wrong story about your brand. Consider this. What are the compelling reasons for a franchisee to trust your franchise system with his or her livelihood, savings, and time? You’ll communicate your narrative through your franchise sales website, social media, and third-party media once you’ve answered these questions. You must tell a transformational story.
3. You’re Not Investing Enough Capital
According to industry standards, you should allocate between $10,000 and $15,000 per franchisee you acquire and onboard. That means you should allocate $100,000 for franchise sales promotion if you want to sign 10 new franchise agreements this year. If you’re not spending these kinds of sums, that’s fine; nevertheless, you’ll need to adjust your expectations and avoid the temptation to spend / squander money on ineffective marketing channels and systems that will just take your money, churn leads, and result in wasted time and limited sales.
Even if you have the funds, if you haven’t yet defined your brand story, you should put your development activities on hold and focus on getting your brand positioning correct.
The Good News…
The good news is that you’re not alone, and franchising can be successful when done correctly. So now might be a good moment to reevaluate your brand, take corrective action, and re-energize your franchise development story.
