Going local, saying no puts rhyme and reason into franchising plan
Illustration by Jonathan Hankin
In the consumer world, we hear the buzzwords every day encouraging us to “shop local” and “keep our money where our heart is.” But how does that translate to the world of franchising?
When we consider that more than 80 percent of the franchisors in the U.S. have fewer than 150 locations, most franchisors would likewise be well advised to heed the local call. Yet all too often, we see small franchise systems that have scattered locations from coast-to-coast without any rhyme or reason.
And if these companies do not have the capital to support a nationwide network, this could easily put them in a difficult situation. If they have a struggling franchise on the other side of the country, they can either spend the time, airfare and energy needed to provide the appropriate support —knowing that their costs could exceed their royalty revenues for the month. Or they could stay home, withhold that support and make money—at least in the short term—at the expense of their troubled franchisee.
So what is one to do when a franchise lead comes in from the other side of the country?
The hardest job in franchising
Years ago, I wrote a column that claimed the hardest job in franchising is turning down the franchise prospect with a check for $50,000 in hand, just waiting to sign your franchise contract. But turning away a franchise that is not a fit or that you cannot support is also one of the most important responsibilities of a franchisor.
When you sell a franchise that does not succeed, either because it was the wrong candidate or in a market you were not prepared to support, you hurt your long-term success rate when franchisee validation goes south. Failing and distant franchisees cost more to support, pay less in the way of royalties (assuming they pay at all) and are more likely to litigate than those that excel.
So why do some franchisors continue to take a scattershot approach? Some simply do not grasp the importance of support. Others, unfortunately, may do so because they are undercapitalized. And some, in their excitement to close a deal, believe that franchisees for their brand are a finite resource—and if they do not secure them now, they will never have another chance to award a franchise in that market.
But the fact of the matter is that franchise prospects are not finite. They are a “manufactured resource.” Spend enough money in a target market with a strong concept, an effective marketing plan and a compelling message and you will generate more candidates.
The easiest way to avoid those tough decisions is to be sure that your franchise marketing efforts are highly concentrated in the markets in which you want to (and should) sell franchises.
Local marketing of your franchise concept is easy to achieve with a myriad of tools, methods and channels available to business owners, whether novice or the tech-savvy. The best way to ensure thorough local market coverage is by way of three components: digital, print and public relations.
Digital marketing: When we think about digital marketing and the internet, we tend to think in global terms. But the good news is local online marketing is easier to execute and more relevant than ever, allowing franchise marketers to break that huge reach into more manageable chunks.
Google Ads, for example, provides a number of filters for serving ads in a local or regional market. And if you want to be hyper-local, you can utilize location extensions within your display ads to show your phone number and location along with your ad. And, while you are at it, do not forget Bing Ads, which show on Bing, MSN, Yahoo, AOL and other searches.
When it comes to SEO practices, make sure your content is geographically targeted. For example, “Houston Automotive Franchise” or “Tallahassee Franchised Florists,” to ensure search engines serve you more readily in those markets. Google has recently increased the amount of characters allowed for both meta and description tags, so they’re easier to write and less tweet-like. And be sure that you utilize online directories including Google My Business and Bing Places for Business.
Of course, social media is the king of geo-targeting. Through Facebook’s Ad Manager there are four ad templates designed specifically for local marketers, and LinkedIn allows you to target prospects by zip code through their advanced search options.
Print advertising and direct contact marketing: These options provide additional opportunities to localize your media spend. Some print publications with larger circulations will often have regional or even sub-regional editions in which you can advertise. But even smaller specialty publications offer regionalized approaches.
The dedicated marketing piece can be inserted on a state-by-state basis in the polybag in which the magazine is delivered. Email blasts to subscribers can be regionalized. And even banner ads on their website can be served selectively based on the location of the inbound server.
Public relations: Finally, public relations activities are often easy to localize. PR professionals can easily target local media, which are often searching for a local “hook” to their stories. Unlike national media, local publications will have a huge appetite for stories on newer franchisors launching a franchise program, selling their first franchise, or promoting a local-kid-makes-good angle.
Like a drug
Ultimately, the thrill of selling a franchise is like a drug for some franchisors. And it can be just as destructive to the system. So until you are ready to support a national roll-out, localize your franchise marketing to focus your franchise marketing efforts at home. And if you get a lead from a market that you are not ready to support, just say no. In the long run, you will be glad you did.
Mark Siebert is CEO of franchise consulting firm iFranchise Group. Reach him at 708.957.2300 or email@example.com. His new book is “Franchise Your Business: The Guide to Employing the Greatest Growth Strategy Ever.”