Franchise Development - why some franchisors succeed and others fail?
1. You have all the right ingredients for a successful brand - systems, marketing model, strong value to the customer and a dynamite track record of success. What does it take to turn your successful business into a successful franchise brand?
Franchising a business is an extensive and longer term strategy for building a business in new markets. Due to the nature of the growth curve and slower ramp-up typical of a new franchise brand, many franchsors don't allow their brands the time or space to truly take shap and evolove, but there are several key items which chan impact the success of a new franchisor.
2. David Vs. Goliath - Start up franchisors are enormously different than established franchisors. Don't base your system's structure and operating elemetns just on mature faranchise systems, what they do isn't necessarily what a new franchise brand should be doing to be successful. Fee Structures, territory marketing, approach and business strategy are very different for an organization such as McDonald's vs. Joe's Hamburgers who is looking to open their first franchise location. Design a franchise system that facilitates the successful Ramp-Up and introduction to the market and then matures as the system, cash flow and infrastructure begin to shape.
3. Build it and they will come - Build a model that is saleable and allows franchisees to justify the investment in a new franchise brand! Focus on growth of your brand before anything else. So many new franchisors kill early opportunities because of relatively menial contract disputes and getting mired in the details or legal work inherent in franchising. When you franchise your business you are partnering with entrepreneur to expand the brand and system to new markets - don't lose site of this as your ultimate goal is to grow the system and add market coverage in new areas.
4. Sizzle is a good thing! A new franchisor needs to make a splash, branding website, look, feel and overall presentation are magnified in importance with a new franchise system. Prospective franchisees don't have the same validation when considering an unproven franchise system and therefore will look very hard at things like logo, tagline, website and overall value of the brand.
5. Coffee is for Closers - A new franchisor has one overriding responsibility in building a new franchise system - Selling. Without franchisees to support and without a network of locations to manage, a new franchisor should have an established franchise lead generation budget and a consistent sales effort with franchise sales staff, a defined franchise sales process and attainable franchise sales goals in place. A new franchisor needs to sell franchises, franchising is a sales game when a new brand is first launched.
6. Keep Things in Perspective - franchising is a long-term growth strategy. The world's largest franchise brands took years, decades in many cases to build several hundred unit chains. Although franchising allows for rapid growth when compared to other alternative growth strategies, the success and cash flow in franchising doesn't come for at least a year into building a new franchise system. Businesses and brands that get into franchising with the idea that they will see windfalls of cash immediately from franchising are typically the ones that are out of franchising within the first six months.
For more informatin on how to franchise your business and how to build your business through franchising, contact us: CONTACT US.
Don’t Focus on the Floor Beneath You, Look Up to the Possibility Above.
When interviewed by Forbes, less than 19% of all respondents in the U.S. said they were satisfied with their job. In a market where jobs seem scarce, this seems like a lot of people who hate what they do. How could this be the case? It’s simple, when you play it safe every day and do what you’ve always done, there is little room for creativity, growth or passion in what you do.
What is it in an Entrepreneur that Drives Them?
Is it the Money? The Ego? The Freedom of Business Ownership? Whatever the reason is behind an Entrepreneur’s drive and commitment to their vision, it is the passion for that goal that pushes them to new limits and heights - passion for their brand, their vision and their own personal accomplishments.
It May Be time to Evolve.
If you own a business and your growth has become stagnant, couldn’t it be time to consider the next phase in your company’s evolution? The greatest accomplishment a leader could ever have is to replicate their success through teaching others how to be successful. Franchising would allow you to build your vision and brand beyond what you can accomplish with your own two hands.
Attend a Free Franchise Your Business Webinar: Link to Presentation
Why is Franchising a valid expansion Vehicle?
- High unemployment rate means significant opportunities for strong candidates.
- High levels of activity in the Franchise Marketplace – January was a record month for lead generation by the web lead generation sites, Franchise Show are setting record attendance levels (Miami Franchise Show over 12,000 attendees).
- High levels of capital sitting on the sideline has become active and people are investing cash into businesses with the increased levels of optimism for the economy.
- People want guidance, direction and “order” to their entrepreneurial endeavor, more candidates are making the decision to start a business with the support and guidance of a franchisor than to go out on their own.
- Economies of Scale from a franchise system allow the small business owner to realize the benefits of a larger group while still maintaining the upside of owning their own business.
Contact us for more information on how to Franchise Your Business. 800-610-0292.
Developing a franchise model requires structure, time, process and consistency.
It is not an easy process in most cases, in particular when you are a Start-Up Franchisor and have yet to sell a franchise unit. Selling franchises requires patience, objectivity and a strong value proposition - the first few franchises typically don't come easy - the buyer needs to be convinced that a new franchise organization is the right fit for them.
1. As a franchisor, you need to be ready to "throw out a big net". Franchise sales typically require 150-350 leads to close a sale depending on the initial investment required of a franchisee to open a location of the business. Be ready to talk with anyone and entertain the thought of working with any potential franchise buyer. Don't sell to anyone who walks in the door...but don't stop people from walking in the door who are interested in having a conversation with you.
2. Have a defined sales process in place. Because of the large volume of leads required to close a franchise sale, it takes a well-defined process to manage this effectively. Franchise Marketing Systems uses a Franchise specific CRM to manage this process and understand where buyers are in the sales model (http://www.franchisemarketingsystems.com/services/franchise-crm/) - whatever you use, you should use something...without an effective lead management tool, you will lose your ability to focus and drive leads from suspects to prospects to deals.
3. Segment Duties. In almost twelve years as a franchise consultant working with business owners to help franchise businesses - I have rarely seen a business owner be effective in the franchise sales process outside of closing the transaction. Franchise buyers are understandably extremely critical of everything a franchise and company has to offer in a franchise concept. The question is always going to come back to why should I buy a franchise from you when I could figure this out on my own? A franchisor should have someone who is taking the initial contacts and "screening" prospects to set them up for the close. No one in the organization is better or more effective at closing the franchise transaction than the owner/founder of the company, on the flip side, no one is worse at being objective and remaining calm, cool and professional when hit with initial questioning by a prospective franchisee. Have someone responsible for franchise sales who works the suspects...when they find a prospect, that is when you get the owner or founder of the company involved. This is a service that Franchise Marketing Systems provides with outsourced franchise sales and franchise development (http://www.franchisemarketingsystems.com/services/franchise-sales/)
4. Franchise Brokers - how or should you work with them? Yes. There are great organizations that provide structure, credibility and support to franchise brokers, you should inquire with them about which brokers to work with and how to connect with valuable broker contacts (http://www.franchiseba.com/). Why do we say yes about working with brokers? Because it goes back to the "Throw out a big net" theory - brokers can provide leads to you in your pursuit of adding new franchise partners, period. You, as the franchisor, have the option to sell to the candidates they bring to you, so you are not held to taking the partners they introduce you to unless you choose to. Good brokers are paid 40-50% of the initial franchise fee. It is worth every penny of it if you tie into a good broker relationship. Some franchise systems such as Puroclean (http://www.puroclean.com/franchise/) have sold a large amount of their 400 plus franchises through broker referrals. Brokers will market for your franchise, generate the leads, introduce the model to franchise prospects and hand you a qualified lead for you as the franchisor to close. It can be an effective marketing and lead generation model for a new franchise concept.
For more information on franchise development and franchise sales, contact Franchise Marketing Systems: (800) 610-0292 / email@example.com)
Franchising can be a lot of Fun. The excitement around a growing brand and the combination of a proven system helping put entrepreneurs into business for themselves is always exciting news.
See the New York Franchise Show Interviews with Money Magazine (Franchise Your Business)
The Franchise Marketplace is full of opportunities....about 3,000 different franchise brands are currently in the market and are growing through franchising. This is not an exact number, but in either case, the franchise industry is full of concepts. In the U.S., a new franchise opens about every 8 seconds of each business day, needless to say, there is a lot of activity and growth happening in the marketplace on a constant basis.
What does this mean to you? Well, if you are a buyer, there are endless opportunities, one of which is sure to fit your needs and interests from a franchised business perspective. As for a franchisor, it means that you have to fight a bit to get air time. You need to get exposure for your brand and business model in order to be seen by valid buyers.
So what are our options? First we need to define the value proposition for our franchise model:
Definition of a franchise:
"A franchise enables you, the investor or franchisee, to operate a business. You pay a franchise fee and you get a format or system developed by the company (franchisor), the right to use the franchisor’s name for a limited time, and assistance. For example, the franchisor may provide you with help in finding a location for your outlet; initial training and an operating manual; and advice on management, marketing, or personnel. The franchisor may provide support through periodic newsletters, a toll-free telephone number, a website, or scheduled workshops or seminars.
Buying a franchise may reduce your investment risk by enabling you to associate with an established company. But the franchise fee can be substantial. You also will have other costs: for example, you may be required to give up significant control over your business while you take on contractual obligations with the franchisor."
Our value proposition should center around this - you are buying less risk, more potential and greater support and a bigger brand. Create the Collateral materials that represent this and SAY this to the potential franchise buyer.
Marketing and Lead Generation:
There are many options for franchise lead generation, the key is to get volume - typically it takes 75 - 150 leads to close a transaction. Luckily, with the Internet marketing platforms it is relatively easy to generate a large volume of leads. Here are the primary targets for franchise marketing:
A. Web Marketing - Online Lead Generation Platforms - good lead sites will generate between 30-60 leads per month for a good brand.
B. Franchise Broker Relationships - Franchise brokers will refer buyers to franchise systems for a commission out of the franchise fee. Brokers will not produce volume, but a good relationship can produce very qualified leads for a growing franchise brand.
C. Franchise Tradeshows - There are shows in virtually every market around the country that allow franchisors to exhibit brands and meet buyers face to face. The two major tradeshow organizations in the franchise industry are the MFV (http://www.mfvexpo.com/) and the National Business Opportunities Show (http://www.franchiseshowinfo.com/) Good franchise shows will produce between 50 and 250 franchise leads.
D. Organic Traffic - Franchise buyers can be connected to your brand through consumer marketing. Things like consumer advertisements on print, tv, radio, napkins and anything else where the brand is presented can also have a "Franchises Available" tag on it. This can produce leads, typically not in volume, but high in quality - these are the best leads in that they came to you specifically for your brand.
You then need to have a defined sales process to manage the leads. Someone in your organization needs to screen the leads and be the caller - the person that makes first contact with the buyers and determines if the franchise makes a fit with the candidate.
There should be a second person to take the next stage of the sales presentation and operates as the Franchise Director. They will present the financials, the details and the serious elements involved in the franchise model.
The discovery day should be the point of closing the franchise transaction where designated members of the franchisor's team meet with the prospect and present the franchise model.
For more information on how to franchise your business or franchising your brand, contact us:
The franchise industry offers franchisors and franchisees many ways to "meet" and be introduced to one another. Franchise Trade Shows are one of the ways that potential franchise buyers can investigate franchise options and Franchisors can "show off" their business opportunities and franchise offerings.
Franchise Marketing Systems markets to potential franchise buyers at these shows and solicits the FMS clients to buyers at these shows. Some of the shows can be enormously productive (New York City in June 2012 had almost 10,000 attendees come to the show).
Franchise Marketing Systems will be exhibiting at the following franchise shows this year for the balance of 2012:
Ft lauderdale, Florida - September 22-23
Denver, Colorado - September 29-30
Los Angeles, California - WCFE - October 12-14
Atlanta, Georgia - October 20-21
Chicago, Illinois - November 10-11
Birmingham, Alabama - November 17-18
FMS at the New York Franchise Show
There are tradeshows in most markets around the U.S. and in many cities around the world. For more information on how to attend or how to exhibit at Franchise Tradeshows contact us:
800-610-0292 or Contact Us.
Franchise Marketing Systems Client Growth
FMS Clients have continued to exceed growth expectations in 2012 with new market growth and the development of several young brands. FMS clients have sold 364 franchises during the past 24 months. The franchise market continues to improve and along with positive economic indicators we see additional growth taking place in the franchise market segment at large.
The Franchise Industry continues to grow at a rapid pace with the difficult job market and the development more programs to assist in financing new businesses throughout the U.S. With the general business environment showing signs of life, more businesses have moved to a growth phase in working to establish brands on a regional and national level.
Franchise Marketing Systems team has grown and is adding new team members to the marketing and franchise development staff: www.FranchiseMarketingSystems.com/About
FMS Clients have seen fantastic growth in unique market segments:
REDRHINO Epoxy Flooring Company – 6 Franchises in 2012
Restoration 1 – 4 Franchises in 2012 (1 Master Franchise)
Snoopit Imports Chinese Imports – 4 Licenses in 2012
Junk King Junk Removal – 5 Franchises in 2012
Your Pro Kitchen – First Franchise sold in 2012
Hood Cleaners of America – 3 Franchises sold in 2012
My House Fitness – First Franchise sold in 2012
The Weave Shop Franchise – 4 Franchises sold in 2012
Mosquito Terminators – 11 Franchises sold in 2012
CFO Systems – 4 Licenses sold in 2012 (1 Master Franchise)
Blue Chip Pet Care – 2 Franchises Sold – (1 Master Franchise) in 2012
Bungobox Moving – 3 Franchises Sold in 2012
Flower Tent – 24 Franchises Sold in 2012
Champion Food Trucks – 1 Franchise Sold in 2012
Caring Matters Home Care – 6 Franchises Sold in 2012
Splash and Dash Pet Care – 6 Licenses Sold in 2012
Park Select Franchise – First Franchise Sold in 2012
Strands of Beauty – First Franchise Sold in 2012
911 Restoration - 5 Franchises Sold in 2012
Vital Restoration – First Franchise Sold in 2012
Ducerus College Planning - 8 Licenses Sold in 2012
Never Paint Again - 1 Franchise Sold in 2012
Ink Ur Body Tattoo Salons - 1 Franchise Sold in 2012
Pet's Healthy Choice - First Franchise Sold in 2012
For a complete listing of Franchise Marketing Systems clients, visit the site: www.FranchiseMarketingSystems.com/Clients
Franchise Marketing Systems exhibits at most of the franchise tradeshows across the United States. Contact us to find out what franchise shows are in your area. The New York Franchise show in June attracted almost 10,000 visitors!
Current FMS Tradeshow Site Schedule:
Fort Lauderdale, FL
Los Angeles / Anaheim, CA
For more information on how to franchise your business or how to develop a franchise system, please contact us (800) 610-0292 or firstname.lastname@example.org
Creating a Franchise - Form Vs. Function:
Franchising is a viable and effective way to build a business, brand and operating model across markets with speed and efficiency. It is has been proven to be one of the most effective and profitable business growth systems in the world over the past one hundred years. In the United States alone, the franchise marketplace produces over $1.5 trillion in annual revenue. There are over 1 million franchised business locations in the United States and over 4,000 franchisors. It is as "proven" as an expansion vehicle can get and has literally epitomized American consumerism.
So why is it that some businesses just don't make it as a franchise and can't get a brand off the ground while others seem to not be able to lose? There can be lots of reasons, some of them have to do with just plain luck, but many of them are tangible and can be planned for. The same can be said about the athlete with loads of talent who can't make it past highschool athletics vs. the average athlete who works hard and makes it to the big leagues through sheer focus and hard work to beat the odds - there was probably luck involved, but one just flat out prepared more and worked harder at it.
To begin, there are two sides to a franchise as to whether it can or should be sold - Form vs. Function. The first is in relation to how "Good the business looks" on the surface and to the untrained eye of a franchise buyer considering the investment in a particular franchise business. When considering whether to franchise a business, you need to consider both the "face" of the business in addition to the value of the operating system.
How do you make a business look appealing as a franchise?
1. Have some style - put time, effort and thought into your brand, don't choose the first logo your web designer offers, create something you are proud of.
2. Have a brand! You can't sell yourself, the business needs to have a personality, message and value proposition that is evident and clear in how you have positioned your company.
3. Show it off - Have a website that looks pretty. It seems simple, but the average franchise buyer doesn't waste much time if they aren't seeing something that catches their eye quickly in evaluating the franchise model.
4. Make sure to have materials that show off your business, brand and concept to both the franchise buyers and the consumer....yes, the franchisee will want to see the materials you use to market and sell your services or products.
The Function of the business is simple....it's the meat of your operation:
1. How does your business make money and if you offered the concept as a franchise could someone else make money doing it?
2. Is it something that can be replicated through systems and procedures that you have proven in practice with the business?
3. Is your service or product needed more than your ability to provide it to the customers in your market or others?
If the business is profitable and you have something that can and should be replicated in new markets, franchising is a very real possibility - contact us for information on How to Franchise Your Business.
How to sell franchises to the right candidates:
In order to franchise your business successfully, it takes the appropriate systems, marketing tools, training systems and scalability.....but most importantly it takes a great screening process. I once heard a great saying about franchising, the three most important elements in franchise sales are Selection....Selection and Selection.
It sounds corny, but it couldn't be more on point when franchising a business. Particularly when a new franchise is taken to market and the first franchise partners are recruited, selection is extremely important. I have seen it many times before, where a new franchisor is excited to put "Pins in the Map" and takes the first checks that walk in the door.
It's easier to talk about it than actually practice the restraint in becoming a new franchisor! Someone calls interested in opening a new location of your franchise and they have a $35,000 check in their hand. This is how someone "slips through the cracks" as the wrong kind of franchisee. This is how it starts, then you have a franchisee who isn't following your system, is "polluting the well" with other franchisees and is causing more heartache for you than it's worth in managing the debacle you've created.
So when you make the decision to franchise your business, what character traits and elements can you look for in new franchise partners that will limit the mistakes?
1. Look for candidates that you can work with. Great talent, drive to succeed and lots of money don't necessarily mean that you can work with a potential franchisee. Make sure that personalities and values match up in order to find good partners.
2. Don't cut corners. Good franchise buyers take time to find and even more time to fully train and support. Don't let your buyers short cut the training or skip steps in your process, this is a sure way to land people who won't value your system or worse yet, your advice.
3. Find the glass is half full partners. Optimism is a funny thing....you either have it or you don't, if you are fighting up-river all the time with your first franchise partners, it's going to be a long ride to get to that point where your franchise system hits critical mass and is able to grow consistently.
4. Look for singers. You want people early on in your franchise system that are willing and able to talk with new buyers about their business, experience and hopefully YOU in a positive way, your first franchisees will be your most important testimonials.
5. Don't sell to under-capitalized buyers. It's a slippery slope....and it gets worse after you've sold it to someone who just doesn't have the capital to launch your franchise. They will do it on the cheap every step of the way to keep the franchise moving forward....and when you do it on the cheap, well....you get cheap results.
For more information on how to franchise your business and building a successful franchise brand, contact Franchise Marketing Systems:
Owning your own business is both rewarding and challenging. If you've had the good fortune of building a successful one, you have realized one of the most fulfilling and significant accomplishments in the world. Business ownership is freedom....it is the ultimate form of accountability, empowerment and opportunity. There are many business owners in the world who are great entrepreneurs. They build fortunes with their salesmanship, creative approaches to problem solving and positive energy and are typically full of charisma....America was built by people with this amazing ability to create markets and build wealth for themselves.
There are many entrepreneurs that fit this description, but there are far less who take the next step in the evolution of their business and truly scale. Scale is the ultimate form of leadership, it is the replication of a business system that is proven to work regardless of whether it's founder is operating the local business or not. It is the proof that systems, a concept and a business model are what makes a company successful and not just the hard work of it's founder. This is what the Ray Kroc, Steve Jobs and Colonel Sanders of the world have done. They have built empires by furthering their creations through the empowerment of others. These are true leaders.....we build monuments to these business leaders and fit to get brief moments of their attention.
Franchising a business is the most proven and effective tool to accomplish this. It is the weapon that business owners have used for over one hundred years to combine the entrepreneurial energy of franchisees with a proven business system from the franchisor to accomplish building scale. Employees don't have the passion for what they do that an owner does....that's why they have chosen to work for someone else. Offering equity in a business sells your soul and part of your vision to another who now has control and time is always ticking on what you can accomplish in building your business, brand and legacy. Franchising answers all of these questions with a proven, effective and timely solution for market expansion and scale.
Franchising isn't for everyone. Some enjoy being in control of everything that happens in their business and "digging the ditches" every day. This is okay, there is plenty of room for ALL of us to be entrepreneurs and build successful businesses for ourselves. But for those who want something bigger, who want to empower others and truly leave a mark behind, franchising might be the strategy and vehicle to accomplish your vision.
For more information on how to Franchise Your Business, Contact Us:
Franchise Expansion in 2012.
Franchise Marketing Systems clients have seen impressive growth in 2012 so far! With increasing growth and momentum, these organizations are taking market share and building brands in their respective industries.
The powerful vehicle of franchising has allowed these organizations to gain traction with customers in new markets far from the reach of the corporate locations while maintaining the quality and standards that made them successful.
Franchise Marketing Systems has worked with the following organizations who have realized growth in 2012 and expanded their brands this year:
(Complete Client List: www.FranchiseMarketingSystems.com/Clients)
REDRHINO (www.REDRHINOFlooring.com) – Epoxy flooring provider – works with residential and commercial clients – sold four new franchises in 2012.
Pet’s Healthy Choice (www.PetsHealthyChoice.com) – Pet food delivery operations – sold one new franchise in 2012.
Restoration 1 (www.Restoration1.com) – Full Service Restoration Service Provider – sold three new franchises in 2012, one being a master franchise.
The Weave Shop (www.TheWeaveShop.com) – Weave salons – work in the specialty hair care market – sold two new franchises in 2012.
Generate My Ads (www.GenerateMyAds.com) – Pre-owned vehicle marketing - sold one new license in 2012.
Mosquito Terminators (www.MosquitoTerminators.com) – Pest control services and sprays – sold six new franchises in 2012, one being a master franchise.
Snoopit Imports (www.Snoopit.com) – Import brokerage business – sold one master license in 2012.
Caring Matters Home Care (www.CaringMattersHomeCare.com) – Senior Care and home care business – sold three franchises in 2012.
Never Paint Again (www.Never-Paint-Again.com) – Residential and commercial painting business – sold one franchise in 2012.
Flower Tent (www.FlowerTent.com) – Flower retail operations in temporary tent locations – sold four franchises in 2012.
Champion Cheesesteaks (www.ChampionCheesesteaks.com) – Mobile food truck operations – sold one franchise in 2012.
Splash and Dash for Dogs (www.SplashandDashforDogs.com) – Dog washing and bathing operations – sold five in 2012.
Chopple (www.Chopple.com) – Web marketing and coupon site license – sold one license in 2012.
For more information on how to franchise your business or whether franchising is the right expansion vehicle for you, contact us: http://www.franchisemarketingsystems.com/FranchiseYourBusiness/