Recruiting a Network of Franchisees: Building the team
Specialist magazines, websites, newspapers, exhibitions and word of mouth are all identified by franchisors as the most useful methods of recruiting franchisees. Stuart Anderson compares the alternatives
With the approach of Franchise Week (starting on 3rd October), the number of opportunities to move into top gear with franchisee recruitment is growing, but with a limited budget how should a franchisor best allocate resources to maximise franchisee recruitment?
The aim of marketing a franchise opportunity is to promote the advantages of the franchise as directly as possible to an audience of serious potential franchise investors, and locate among them the individuals who have the abilities and attitudes to make a success of the franchise.
The first step is to identify the ideal franchisee profile, and how much leeway in deviating from it can be given to franchisee candidates. Does the operation of the franchise require previous industry experience, or is all the knowledge needed contained in the initial franchisee training programme? Is the franchisor looking for a hands-on operator who will provide the service personally to guarantee quality, or a business builder who may get involved 'on the shopfloor' early on but is planning to grow the operation to cover multiple vehicles/locations/territories? Will the franchisee need to be comfortable in a sales role, or does the franchisor have a sales department in place? All important questions, the answers to which must form part of the marketing message to ensure it generates quality leads.
The next step is to implement the marketing. The 2005 NatWest/British Franchise Association UK Franchise Survey polled franchisors on the most useful methods of recruiting franchisees (see fig. 1), identifying exhibitions; websites - general franchise sites, the British Franchise Association's site or the franchisor's own site; word of mouth; and print media such as magazines and newspapers, as the most common forms of franchisee lead generation.
Rated as the most useful franchisee recruitment tool by only 21 per cent of respondents to the Franchise Survey, nevertheless the UK's franchise exhibitions are still very popular affairs, with the National Franchise Exhibition expected to attract in the region of 250 franchisors to exhibit. The low scoring in the survey probably reflects the poor cost-effectiveness of exhibitions - the costs involved in booking stand space, designing and building a stand, transportation, hotel bills and staff time can be prohibitive to many brands. However, exhibitions do present an excellent opportunity for the franchisor to get in front of an audience of potential investors and promote the opportunity over a short space of time. A lot of pre-qualification can be carried out at these events, quickly progressing serious leads to advanced talks in the follow up stages.
A franchisor should approach an exhibition with a firm idea of what needs to be achieved to justify the investment. Targets must be set, and strategies of how to meet them fully discussed with the staff that will be manning the stand.
The franchisor must consider how the stand will attract visitors. A well-designed and professionally presented stand manned by welcoming faces is vital, but many franchisors go the extra mile adding interactive or performance elements to their stands. ChipsAway is an example, its stands generating heavy interest through its floor show involving Chairman Roger Wild and his staff inviting visitors to identify the repairs on a vehicle. Other stands, such as Subway and Costa Coffee, give out products to visitors as they talk to the staff.
Once the visitors are flowing onto the stand, the staff must identify those that are worth spending time with. A chat on an exhibition stand is the start of a two-way interview process - while making a good impression with the visitors and promoting the franchise opportunity, the stand staff must also choose who they spend their time with wisely as there's only a finite amount in which to hit those quality lead targets.
The franchisor must ensure all staff are fully aware of the types of individuals sought for the franchise, and have a set of questions to fire back at the visitors designed to quickly sort them into 'priority follow ups', 'information pack recipients' and 'time wasters'. By making sure the staff are flagging up the leads of most serious interest, a structured follow up phase after the exhibition will ensure they are contacted swiftly and not needlessly lost to a more 'switched on' competitor. 'You need to be noticed and remembered, and your staff must be able to engage visitors in conversation,' advises Franchise Development Services Franchise Consultant Tony Urwin. 'View the purpose of the exhibition as imparting information quickly and creatively. Your exhibition staff should be well presented, well informed and under strict instructions not to sell! For most visitors to a franchise exhibition are simply exploring the market place and are deterred by pushiness. Your task here is to persuade.'
Google the word 'franchise' and you come up with over 17.9 million hits for the UK alone. The challenge here for the franchisor is to be heard above the cacophony of featured links, pop-up ads and flash presentations.
A 'franchise' tab on the franchisor's own website is a simple start. Every serious lead will check out the website sooner or later, if only to get an idea of how the franchisor presents itself, so including some information on territories available, package details and response information is a good start.
A serious web strategy is going to involve online advertising, i.e. a budget. There are a number of professional lead generation websites such as uk.betheboss.com or the British Franchise Association's website, and some less professional sites worth avoiding. To identify the best sites to use, a franchisor needs to refer back to the ideal franchisee profile and put himself in that person's shoes. What kind of searches is the potential franchisee likely to perform? Which sites are likely to attract the visitor into registering their details? What information is the potential franchisee going to require before responding?
There is nothing wrong with field-testing the site's responses. By selecting and registering for an opportunity in the same sector, the field tester can gauge the speed and professionalism of the response from the website.
Websites represent a far more cost effective use of investment capital than exhibitions, but because of the ease of responding they bring with them plenty of frustrating, time wasting leads. Nevertheless, the UK Franchise Survey notes 'a pronounced shift towards using the internet as a resource for recruiting franchisees can be identified.'
Newspaper advertising ranked fifth in the UK Franchise Survey's poll, with 25 per cent of franchisors rating it as their most useful franchisee recruitment tool. Newspapers are a significant format for this purpose, with 21 per cent of new franchisees (who launched their business in the last three years) crediting them as where they first heard about franchising (followed by 20 per cent from magazines and 20 per cent from friends and relatives).
Many newspapers run regular franchise sections collecting the advertisements of franchisors together in one place. However, newspaper advertising represents a significant investment on the part of a franchisor, particularly for an ongoing advertising campaign designed to build a continuing flow of leads.
Given the high cost nature of newspaper advertising, the use of the space must be optimised. This does not necessarily mean cramming as much text in as possible - rather a nicely designed advert which conveys the franchisor's corporate image, the main strengths of the opportunity, the type of respondent sought and how to obtain more detailed information is what the reader is looking for.
Topping the poll with 37 per cent of the responding franchisors, magazine advertising represents a popular method of promoting a franchise opportunity to a targeted readership of potential franchise investors. Representing a lower per edition investment in terms of space per pound, a magazine promotion brings the added benefits of full colour, relevant supporting editorial and the opportunity to provide enough information to pre-qualify the leads it generates.
By investing in continuing promotions, franchisors can generate a level of trust in their opportunities among the regular readership and build a growing response. Magazines are still viewed as a highly trusted medium. Research by the Periodical Publishers Association has indicated that keen consumers of magazines trust their publication far more than consumers of TV, radio or newspapers. In presenting the findings Sian Davis, Chief Executive of the Henley Centre, said: 'Magazines can access personal networks of trust and you can't underestimate that in today's culture of cynicism.'
However a franchisor promotes the franchise opportunity, the importance of tracking the sources of its leads is vital to professionally developing a franchise network. When a potential franchisee phones through to head office, all staff must be trained to ask where the caller first heard about the franchise opportunity. Emailed registration forms on the franchisor's website should include a field asking the same question. Many exhibition visitors research the market prior to the event and attend with a 'wish list' of exhibitors they want to talk to, so the franchisor should find out where their name came up. If an evolving advertisement campaign has brought a response, discovering which advertisement generated the interest should direct the contents and direction of future promotions.
By closely monitoring the sources generating interest, the franchisor can prune, modify and increase promotional activity to increase leadflow. 'Note down exactly how many leads (a strategy) brings you, and how many of those turn into sales,' suggests Action International coach Richard Giannini. 'Compare that with the marketing cost, and judge whether it has been a good strategy. Very soon, you'll develop a collection of marketing strategies that work, and weed out all the costly ones. Now that's a business success formula!'