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For Emerging Franchisors, Three Mistakes to Avoid


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Brent Dowling of RainTree

Brent Dowling counts three mistakes often made by emerging franchisors in their quest to grow, and he offers them in response to Franchise Times’ Living Large column, which is following young franchisors all year to see how they tackle various challenges.  

No. 1: Franchisors that pocket initial franchise fees “way too early,” says Dowling, who is COO of RainTree, a Denver-based company that sells franchises for its clients, many of which are in their early years.. “We advise our partners for at least the first three years of the business, you’ve got to re-invest anything that comes in, back in the brand,” he says, such as into lead generation marketing, real estate consulting, technology infrastructure and the like.

No. 2: Franchisors that put money into their brand, but go “way too far,” building out a big office or hiring a big team. Often times they’ll bring in senior people who they can afford at one point in time. “They’ll realize franchising, or franchise sales at least, is very seasonal. It will really wind down at Thanksgiving, and won’t pick up until the end of January.” He says a great way to avoid the mistake but still serve franchisees is to outsource—hire consultants for site selection, franchise sales, etc.

No. 3: Franchisors that fail to embrace technology. “Recruiting franchisees was completely different five years ago than it is today,” he says. “It comes down to, the way that we consume content and information has changed dramatically in the last few years.” Before, franchisors would put out a teaser to pique interest, then let salespeople walk the prospect through the information. “People are used to finding all the information they need through the Internet within a matter of minutes or hours” today, he points out. “So you’ve got to embrace that. You’ve got to have a website that has all the information on the franchise opportunity.”

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The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Laura MichaelsLaura Michaels is editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
 
Beth EwenBeth Ewen is senior editor of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
 
Nicholas UptonNicholas Upton is restaurants editor at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
 
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at
 twitter.com/mlarson1011.
 

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