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If success is a cycle, our take offers new paradigm for franchise sales


Mark Siebert

Illustration by Jonathan Hankin

The one question I am asked with the greatest frequency is, “How many franchises can I expect to sell?” But what most people do not realize is they are asking the wrong question. Instead, they should be asking, “How many franchises should I sell?”

Don’t get me wrong. Franchise marketing and sales are by no means easy. But if you do things right, they are relatively predictable. But “doing things right” involves much more than good marketing and sales techniques, as the Franchise Success Cycle that our firm has developed illustrates.

Building the model

Before developing any marketing materials or kick-starting the sales process, the first rule of franchising is to create a replicable and profitable business model. Franchisees buy because they believe the business model will provide them with a reasonable return on their time and investment—so if the model offers solid returns, that is a good start. If it does not, focus there.

But a great model alone is not enough.  The model must offer a unique value proposition. In order to stand out amongst your competition, you have to offer something nobody else can. Think in terms of the McMillan|Doolittle “EST” model. Instead of trying to be the best at everything, find your “EST” and push it hard. Aim to become the biggest, cheapest, easiest, quickest or hottest.

Stake your position in one (and at most, two) of these five ESTs. And remember Al Reis’s maxim: “The essence of positioning is sacrifice. You must be willing to give up something in order to establish that unique position.”

Hot concepts do not compete on price. Price competitors cannot compete effectively on service. Trying to be all thing to all people is a recipe for excelling at nothing.

Your EST does not, by the way, have to come at the consumer level. You can also differentiate your offer at the franchise level—lower fees, higher levels of service and support, better consumer marketing, larger territories, reduced investment costs, financial performance representations, and other strategic planning decisions can all be used to differentiate your franchise program.

So before you even get started, it is imperative that you understand exactly who you are competing with and how you will choose to compete. If you fail to stake your position in the marketplace, rest assured your competitors will find one for you.

Gaining predictability

On average, franchisors spend from $7,000 to $10,000 on marketing for every franchise sale, which will occur, on average, 12 to 16 weeks following lead generation. Those numbers can increase or decrease based on a number of factors, the most important of which will be where you allocate your franchise marketing spend and the messaging you use to attract candidates.

The media and messaging that you use to attract your ideal candidate will vary substantially based on your desired candidate and the size of your investment. So it is imperative that you understand not only who your candidate is, but what media he or she is likely to consume when investigating a franchise and what messaging is likely to resonate.

Unfortunately, the marketing planning done by many franchisors lies somewhere between “best guess” and “trial-and-error.” Given the low overall close rates and high cost-per-sale numbers typical in franchise sales, these methods can be extremely expensive.  

Spend your money in the wrong media or with the wrong message and you can throw the numbers out the window.

A better method, while more expensive initially, involves up-front primary and secondary research combined with A-B message testing and refinement. But once the media and message are refined, the number of franchises you sell becomes a math problem—assuming, of course, that someone on your team has the sales skills necessary to move qualified candidates forward through the process.

Winning validation

Let me return to the Franchise Success Cycle by our firm. (Go to ifranchisegroup.com/franchise-success-cycle to see it.) While the elements on the right side of the success cycle, such as concept/value proposition, marketing plan and sales process, influence short-term sales, it is the left side of the cycle that will dictate your long-term overall success.
That’s because the elements on the right side of the success cycle—selectivity, documentation and training, opening assistance, ongoing and field support, and communication—will lead to franchisee success.  And franchisee success, and the validation that comes with it, is at the core of any successful franchise program.

Regardless of how well your corporate locations perform, struggling franchisees indicate either a concept problem or a failure at the franchisor level. And while no concept can guarantee success, a systemwide lack of validation will communicate that failure and in the process kill future sales.

It is imperative that franchisors work diligently with every troubled franchise to see what they can do to turn the situation around. And perhaps equally important, the franchisor needs to effectively communicate their concerns and to empathize with that franchisee.

Simply stated, if most of your franchisees sing your praises to the rafters, marketing and selling franchises becomes (almost) easy.

Value propositions are improved by better branding and buying power. Marketing plans have the benefit of more robust data, and messaging is augmented by the testimonials of successful franchisees. Make your franchisees successful and you will be well on your way to sustained success.

Mark Siebert is CEO of franchise consulting firm iFranchise Group. Reach him at 708.957.2300 or info@ifranchisegroup.com. His new book is “Franchise Your Business: The Guide to Employing the Greatest Growth Strategy Ever.”

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