Franchise Things

Episode #3Franchise Things:You Can’t Be a Franchisor Without Franchisees: Franchise Sales for Emerging Franchisors

September 29, 2021

Mike Drumm with David Gollohan, a 20-year veteran in the franchise industry, creator of Franchise In-Sites and C.O.O. of Franchise Direct Digital, discuss the importance of selling franchises and the information you need to make those first steps.

Important timestamps:

05:59 What does it take to franchise?

09:12 Advertising budgets and franchise portals

19:00 Understanding advertising placements and where best converting leads are coming from.

45:31 Advertising Content

1:03:30 What happens now that I have leads?

What does it take to franchise?

  • It takes L.O.T.S.:
    • Legal
    • Operations Manual
    • Technology
    • Sales Strategy
  • To be a successful franchisor, you must create a marketing budget to ensure the successful expansion of your business.

Advertising Budgets:

  • The current average dollar spent in marketing dollars for new leads is $12,138.
  • When everyone is your target client, it is expensive to reach everyone- be specific in who you want your target profile to include. Entrepreneurs start their own businesses; you want a small business owner who wants to follow your system.

How many franchisors, especially new franchisors, actually have a franchise budget?

  • The short answer- not nearly enough.
  • Although the average dollar spent may be out of pace with your planned annual growth goal, pursue that $12,000 and come in braced for that number till you have proven you can surpass it.

What is a franchise portal?

    • Franchise portals are directory sites that have an aggregate of info on multiple different concepts to help you collect and track potential leads. Franchise portals allow you to easily search for franchise opportunities by using filters such as how much you have to invest, what state you would like to operate in and franchise categories.
    • Begin with finding out what your Annual Growth Goal is based on what is best for your business.
    • It can take from 100-120 solid leads per unit to convert a sale. Understand the individual costs of obtaining those leads.
    • Top 3 franchise portals to consider-
      1. Franchise Direct
      2. Franchise Opportunities Network
      3. BizBuySell.com (the only site listed that offers resale properties as well)

Advertising Placements

How are website visitors finding you?

  • The viability of a social media presence has become far stronger in recent years.
  • For potential franchisees, consider platforms such as Facebook, LinkedIn, and Instagram as their user ages may align better with someone who may be interested in buying a business.
    Franchise brokers are another option to consider, however, they are best used for secondary and tertiary markets.
    When considering a broker, choose someone with a significant amount of experience in franchising.
  • The goal is to make money from your franchisee’s success and not from the franchise fee. Know that the franchisees you are seeking are pivotal to the future of your investment.
  • Have validation and know when to say “no” to a franchisee that is not right for you or your business.Your website is your foundation and will be where you will find your best converting leads.
  • Your website is your foundation and will be where you will find your best converting leads.
    Usability across all devices on your website along with page load speeds are vital to getting website visitors to go further than the first page on your website.
    Understand that your social media presence must be maintained and updated regularly, or visitors may think your overall presence is weak or nonexistent. Stay connected!
  • Although, Search Engine Optimization (SEO) can take years to cultivate, it is the best way to help your website compete with the franchise portals.
  • If you need more immediate results, consider using Search Engine Marketing (SEM) or Pay Per Click Marketing (PPC) options to get your website on top of those results pages.
  • Know that on average 75% of people will not look past page one when searching for franchise options.
  • Third Party Email allows you to get your info out to whatever specific demographic you would like.
  • Talk to other successful franchise systems. Follow their success and mimic it.
  • Give as much detail as you can to those listed above and it will double your traffic of those who click and submit on your website without any unfair expectations.

What content should I be creating when using a franchise portal?

  • Less is more when creating your content. Be concise, but also inviting with your descriptions.
  • Your 3 images should include an image the following:
    1. The outside of the building or property when your business is closed
    2. The inside of your business when the business is closed
    3. The inside of your business with motion (ex. someone working at a desk or helping a customer)
  • Your text should contain the following:
    1. The history of your business and why they would want to choose your franchise
    2. What it takes to qualify
    3. What assistance you give in terms of training and support
  • Average cost does not exist; it is just the median of what you may spend on portal advertising costs.
  • It is worth noting that 80% of the leads coming into portals have less than $100,000 to spend. Know whether or not portal advertising is right for your franchise.
  • If you’re attempting to make a significant presence with a large number of units, understand that population numbers play a big role. States like California, Illinois, and New York make up 40% of your leads. Strongly consider registering in all states.
  • Again, if you have a million-dollar concept, portal advertising might not be the best option for you to obtain leads. Understand what is best for your concept.
  • When hiring sales staff, go with someone who has significant experience in franchising and not just sales in general. The franchise sector is very specific and unique.
  • Also, hire staff with good people skills that have the ability to create good repour with many types of people. They need to be able to relate to you and your leads.
  • The most common type of sales staff used is in-house.
  • The Golden Rules: do not chase bad leads and know when to say “no”.
  • The CRM system is critical to being able to reach any leads that come in. It can be difficult to be physically available every time a potential buyer calls, emails, or texts. Have a plan in place for how to immediately reach out to them.
  • Having information like how much you are spending per month on these leads or what your current cost for acquisition is, is vital to being able to accurately analyze the data and how it’s working for you.
  • You need to be able to track the leads coming in, any contacts you received, any progressions, FDD and sales, and what each of these costs you. This information is important to you understanding the comparative data you are analyzing.
  • You should be able to convert 10% of your leads into candidates and 10% of your candidates into sales. Knowing how your sales process is working for you is critical to reaching this goal.

Important timestamps

  • 5:59 What does it take to franchise?
  • 9:12 Advertising budgets and franchise portals
  • 19:00 Understanding advertising placements and where best converting leads are coming from.
  • 45:31 Advertising Content
  • 1:03:30 What happens now that I have leads?