For many brands, 2020 and 2021 have been very difficult years to expand across borders for obvious reasons. 2022 brings a much more positive outlook so now is the time to ensure that the process of finding franchise investors in various countries is set up in the best possible way.
Over the last two decades, I’ve seen a high failure rate of brands attempting to expand into new countries by either failing to attract any serious interest, or through attracting the wrong franchise partners. This insight has helped me to realize why this has been happening, and continues to happen, and what needs to be done about it.
In this article, I hope to give brands a clear insight into how to attract the right profile of franchise investor, and ensure that, when decisions are made on both sides, those decisions are the right ones for all concerned.
I believe in sustainable franchising, and for franchising to be sustainable for everyone involved, the right foundations need to be laid in the first place.
There are four key essentials that need to be in place to allow for successful franchise recruitment:
- Tell a great brand story and communicate it effectively
- Set a marketing budget and manage it closely
- Ensure you have a good internal process to handle candidates
- Create relationships with relevant franchise consultants.
1. Telling a great brand story
This is a critical first stage and one which most brands don’t do very well. To attract the right franchise investor, brands need to ensure that there is good information available about the franchise opportunity. This information shouldn’t just be made available when interest is shown, but should be available in the public domain and used to attract people in the first place.
A lot of franchise prospectuses, franchise brochures, or franchise information memorandums are created in order to be able to give to people who show interest, and, although it’s important to have a mix of this marketing material for different stages, it’s imperative that a lot of this information should be made available online as well.
80 per cent of franchise investors view information about a franchise opportunity firstly on their smart phone these days. This includes information found from emails, websites, documents, text messages, social media channels and chat apps like WhatsApp, Facebook Messenger and so on. Brands need to be using a mix of all these communication channels to ensure they get their brand story to the right people, at the right time.
The simplest way for brands to ensure they are telling a great brand story is to firstly setup a dedicated franchise brochure website, which they have total control over and can easily add to or make changes with great flexibility. I call it a franchise ‘brochure’ website because that is what it is: an online version of a comprehensive franchise prospectus document.
This is essentially a website that candidates can be pointed towards once they’ve shown an initial interest, but, over time, it can also become a valuable source of new enquiries as it gets seen and indexed by Google.
I could write a whole article on exactly what information needs to be on this website, and how it’s presented with a specific navigational structure and layout, but I’ll leave that for another time.
What I would advise is that budget is committed to getting this website in place, and it can be used to target franchise investors in multiple countries with the right approach.
2. Set a marketing budget
Far too many brands rely purely on franchise consultants in the country they’re targeting to find the right franchise investor without allocating any kind of dedicated marketing budget. Sometimes this can work well, and is a low-risk strategy, but often it results in brands waiting years to find the right partner, and sometimes not finding them at all. Brands should take a more proactive approach to attracting franchise investors, and, as well as working with the right franchise consultants to identify candidates, should also ensure there is a marketing budget to help those consultants position the brand in the right way.
If this is not done, then there is often no true accountability on either side, and without accountability time can just go by without results and without a shared strategic approach.
3. Create good internal processes
Too often brands spend a lot of money and a lot of time attracting the right profile of franchise investor without giving much focus on setting up a good internal process to handle this type of enquiry.
The brands that are doing deals with the right investors are those that create accountability at every part of the process from helping people understand what the opportunity is, all the way through to signing an agreement (which typically would be a master license, area developer, multi-unit or singleunit franchise agreement).
A lot of the time, the right franchise investors are already successful business people, and many may already have good knowledge and experience of franchising, so if brands don’t help these candidates move through the process in the right way, then many candidates are likely to look the other way!
4. Use franchise consultants
Often known as franchise brokers, and sometimes franchise matchmakers, the right kind of franchise consultant can be the difference between success and failure when looking to expand into another country or countries. It is vital to establish a good relationship and get advice from relevant franchise consultants as they understand what the franchise sector looks like in a particular region much better than most brands do.
To support these franchise consultants, brands need to ensure that, before they enter into any kind of recruitment agreement, they have set a good foundation based on the first three points I’ve written about above.
Remember, these franchise consultants are great at what they do, but they need the tools to be the best at what they do for each brand they work with.
The bottom line is that the brands that are successful at signing deals and expanding into other countries are doing most of the things I’ve written about above.
Dugan Aylen is a director at The Franchising Centre, Europe’s largest franchise consultancy. He has 20 years’ experience in advising brands how best to attract the right profile of franchise investor, and then ensuring there is the right kind of process in place to get deals done