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Article - Finding Franchisees 2010 & Beyond
Finding Franchisees: Options in 2010 and Beyond
In the world of franchising, over 200 established brands begin franchising each year. In 2009 the number was lower due to economic conditions. 2010, however, is expected to be another growth year for new franchise brands.
On the franchising investing front, in 2010 many successful executives (employed and un- or even under-employed) are going to be looking for the “Next Big Thing” due to the lacking trust in the stability and security of the job market. This represents a unique growth opportunity for franchisors.
Franchisors often express that their greatest challenge is finding "Franchisees!" Unless the founder had the capital to expand with company-owned stores, a brand will not grow without 1) consistently recruiting new franchisees, and keeping franchisees the franchisor already has.
Finding new franchisees is tricky. Most affordable advertising, i.e., internet advertising offers broad, national coverage. But before a new brand is ready to grow nationally, often it needs to prove itself in both local and regional markets.
Good News! Franchise brands do have several choices designed to help them find franchisees in local and regional markets. These include:
1. Google AdWords for your type of business franchise. Google allows franchisors to limit their ads so they appear only in searches that originate from target markets or specific states that franchisors choose.
2. Local Sunday Newspapers -- both print and online versions. Historically, this option works best for resale opportunities or to promote specific towns or locations where franchises are available.
3. www.FranchiseSforSale.com. Franchisors can limit their advertising to appear only in the states they choose. The site charges a "success marketing fee," meaning franchisors, pay only for leads that who execute franchise agreements.
4. Networking. Reach out to local bankers, lawyers, CPAs and Chamber of Commerce staff and board members. They know people who are looking for a unique opportunity.
5. Franchise Brokers. Business/franchise brokers often introduce serious candidates to franchisors and are paid a commission only if the candidate signs a franchise agreement.
I caution franchisors against advertising in national media vehicles until franchisors are ready to expand nationally. It isn't the time for franchisors to decide whether they could support a franchisee 3,000 miles away from headquarters after leads start inquiring. Lead flow shouldn\'t determine the franchisor\'s expansion strategy. The expansion strategy should determine lead flow.
To grow your franchise brand successfully, you want to create an expansion strategy and decide upfront where and how you want to grow. Then use your marketing budget wisely to fit your local, regional or national plans.
