Emerging brands share advice to accelerate franchise sales
Franchisors need only look at the situation playing out within the Burgerim system to understand what can happen when a focus on franchise sales alone—without much regard for ensuring a franchisee is qualified or that the brand has a sound support structure—drives the system. Those sales can quickly outstrip unit openings and, in the case of Burgerim, quickly spiral into ongoing operational struggles and franchisees closing the stores they were able to open.
Burgerim is an extreme example, to be sure, and there’s much more to the story coming in our April issue, but emerging brands can learn plenty from the situation, including the importance of establishing criteria for qualified franchisees—and sticking to it. Selling a franchise to every person who wants to buy one doesn’t bode well for system longevity.
Generating quality leads is easier said than done. Once you know who you’re looking for, how do you find those prospects, or help them find you? Start by presenting a clear message that details the concept, its value proposition, how that translates to profitability and what the franchisor does to help its ‘zees attain that profitability.
Transparency throughout the sales process is also crucial to lay the groundwork for a strong franchisor-franchisee relationship and, ultimately, develop successful operators.
Deploy ‘vigorous’ discovery
Michael Blair, CEO of Deka Lash, notes that early transparency is what helped cultivate credibility with franchise prospects as he and wife and co-founder Jennifer worked to grow their eyelash extension brand.
“One of the things we’ve done early on and still do is be really authentic. We celebrate our strengths and also admit there are some areas we can improve,” says Michael. “We emphasize that this is an emerging brand and consumer segment. You’re getting in at the ground level,” which has its benefits and challenges.
Deka Lash, which the Blairs began franchising in 2016 after opening four company studios in the Pittsburgh, hit the 80-unit mark earlier this year and is on pace to have 100 open locations by the summer. After the distributor model they started with proved problematic in maintaining brand standards, the pair decided franchising was a better fit.
“If this could work in Pittsburgh—it’s not exactly the beauty capital of America—it could work elsewhere,” says Michael of their early thinking. He had built and sold two companies of his own in the past, one in software and one in finance, while Jennifer, now chief experience officer, had started an independent teeth-whitening business and then added eyelash extensions. An early investor, Michael Debenham, who had previous franchise experience at Liberty Tax and Legends Boxing, helped them with the franchise structure and now is chief development officer.
“That was a big move for us at the beginning,” says Jennifer of hiring someone to oversee franchise sales, but necessary. “We knew what we didn’t know,” puts in Michael.
The brand also began working with franchise brokers early on, a strategy that’s been effective but requires commitment, not a hands-off approach. In a broker industry with little regulation, it’s incumbent upon franchisors to take an active role in educating brokers on their brand.
“When we first started with that broker network, they didn’t even know about eyelash,” recalls Jennifer. “I remember standing there and they were just looking at me like, what?” She stresses the importance of getting to know the consultants working on one’s brand and ensuring they understand the concept before selling it.
“We’ve gotten very qualified leads and they do a lot of the legwork,” she continues, which funnels into a discovery process.
“It’s a very vigorous, long process,” says Michael, one they developed to result in serious buyers at the end. Steps including watching and discussing a series of brand videos and participating in calls over several weeks “that they have to show up for.
“We can see, are they bucking the system, are they willing to put in the time. That shows if they’re serious buyers,” he says.
The cost of investment for a Deka Lash franchise is between $179,251 and $426,491. Michael says they’ve found that “people who come out of corporate America who are very comfortable following processes, they work very well for us.”
“We’ve also had a lot of success with power couples,” he continues. “These are husbands and wives who are ready for their next chapter and they support each other and want to grow a business.”
Deka Lash founders Michael and Jennifer Blair use a long, vigorous process to select ‘zees.
Passion and execution
Andrew Gruel was admittedly skeptical of franchising before deciding to expand his fast-casual seafood shack concept, Slapfish, in 2013. “My initial perception, for someone who grew up in the industry on the culinary side, you think of franchising as all these people, franchisees, not following recipes,” says Gruel, chef and CEO of the restaurant brand he created in 2011. But then he met Dan Rowe, CEO of franchise development firm Fransmart, who stopped into the Huntington Beach, California, restaurant and later illuminated the advantages of the model and how to put brand standards in place.
Fransmart now handles franchise development for the brand. Slapfish has 23 units and last fall signed on former NFL player Mac Haik to open 30 locations in Texas and Arkansas as part of an agreement that also makes Haik an ownership investor in the franchise. Gruel says for someone like him without any franchise experience, partnering with a development firm was the right move and has given the brand further access to experienced franchisees as Slapfish works to sign multi-unit deals.
“In the beginning it was, are you passionate about the brand?” says Gruel. “But as we’ve developed the systems it’s gone from, OK, you have the passion to, OK, and can you execute the system.” Fransmart, he notes, “makes their money by selling good deals,” and thus brings in qualified candidates.
Like the Blairs, Gruel says young franchisors should be open and honest about areas within the system that need improvement—and opportunities for early franchisees to provide input.
“What I see a lot of franchisors do is, they try to masquerade that they’ve got it all figured out,” says Gruel.
Advice from the experts
Start close to home. New franchisors should be mindful of geography as they’re signing their first deals, says Kay Ainsley, managing director at franchise advisory firm MSA Worldwide. “If you’re in Minnesota and your first franchisee is in Florida, while it might sound good to travel to Miami Beach, you’re spending a lot of resources on time and travel” to support the opening, she notes.
Tap your fans. “A lot of franchisors overlook letting their current customer base, clients, employees, suppliers, know about their franchise plans,” says Ainsley. “A lot of your first franchisees come through referrals.” Suppliers, she points out, are also familiar with different territories and can offer some insight into new markets.
Deploy discipline. Burn Boot Camp CEO Devan Kline says the biggest challenge in growing the fitness franchise “has been forcing ourselves to say ‘no’ to prospective franchise partners for a variety of reasons,” he said. “There must be a full alignment from both sides for the relationship to work appropriately. Once that territory has a franchise agreement associated with it, you better be 100 percent sure you want that person to be your partner for years to come.”