Here’s what we know about franchise recruitment today: companies that knew how to recruit franchisees prior to the pandemic still know how to recruit franchisees now. But it’s an entirely different process due to complex challenges that require different skill sets and expectations.
The best news for franchise recruiters may be that it can be less costly now to recruit franchisees than prior to the pandemic. The worst news: it takes longer to close a sale. Prospects are plentiful and finding them can be inexpensive. There are endless opportunities to talk to people – and especially to Zoom with people – about your franchise opportunity. However, it’s much more challenging to get a deal signed. That being the case, maybe “less costly” is a misnomer.
Best practices among successful franchise recruiters today are not dramatically different than they were pre-pandemic, but here’s what you can do to step up your franchise recruitment results:
Take advantage of franchsing’s popularity
Almost everyone seems to be interested in franchising today. So talk it up! According to Keith Gerson of FranConnect, a franchise management software, franchise lead generation is up 18.3 per cent in the United States. Franchisors agree that lead generation is up, but the percentages vary by country.
Countries in Asia, South, and Central America, where COVID hit very hard and lingered, show less interest in franchising than do other countries, reports Walter Seltzer, who oversees international development for U.S.-based United Franchise Group, which operates in more than 80 countries.
Interest is also determined by “rules on health and travel,” explains Fred Marfleet, founder and executive chairman of Expense Reduction Analysts (ERA), based in England. Marfleet says, “Lockdowns and changes in work patterns” are also determinants of interest. These issues have prevented ERA from gaining a foothold in key countries.
However, countless people universally have lost jobs, decided to change jobs, or retired (often prematurely) since early 2020, and any time people reconsider their employment options they tend to think about doing something for themselves.
That’s when they think about business ownership and that inevitably leads them to consider franchising, usually the safest choice for business ownership universally.
Bottom line: people are more curious today about franchise ownership than they have been in a decade and successful recruiters are taking advantage of these circumstances.
Evolve with the times
“Stick with what you were doing pre-pandemic so long as it was successful,” advises Seltzer. But changes may be necessary. Prior to early 2020, UFG’s recruiters would not have considered spending hours on a phone call, or a Zoom call, to help a prospect better understand the opportunities of franchise ownership.
They would only do that in person, either at a trade show, a personal visit, or at a scheduled discovery day. But now those same recruiters spend the better part of their day talking to people online. They’re covering the same information but presenting it differently.
Same for ERA’s recruiters. Says Marfleet, “The world was going digital before COVID, and the pandemic has speeded up the process. The use of DocuSign for signing franchise agreements is a good example. It’s become the norm. It saves time, paper and courier costs and it makes it easier to get a candidate to come to a decision.”
“The best news for franchise recruiters may be that it can be less costly now to recruit franchisees than prior to the pandemic”
Bottom line: do what works, but make the changes forced by the pandemic. Adds Marfleet, “Digital is the way to go; and we have been hiring young, digital-savvy members to our recruitment teams.”
Build the recruitment pyramid
Don’t skip steps in the recruitment process. You’ll be tempted to do so, says Seltzer, because the entire process now seems easier. The switch over to digitally empowered sales doesn’t always make it easier to close sales.
People are facing different issues today. Ignoring or simply not addressing those issues won’t help. Uncertainty is a major issue. Government regulations and COVID-related rules are unsettling. Many prospects are “sitting on the fence,” says Marfleet. “There’s a lot of ‘let’s see what’s going to happen’ among franchise prospects before they make decisions. This makes it more challenging to sell franchises.” Bottom line: selling is like building a pyramid. Every stone has its purpose and must be in place to successfully reach the top. Skip a step or two and your sales efforts will crumble.
Remember the human element
Build relationships! In pre-COVID days you wouldn’t think twice about spending half a day or more with a prospect to cover all the details of a franchise opportunity. That time was necessary not just to “cover all the details” but to build a relationship.
That’s what digital technology doesn’t do as well. “We’re losing those ‘water cooler’ moments,” explains Marfleet. It’s more difficult to get a prospect to open up and talk about what they’re really thinking without face-to-face interactions. Recruiters now need to spend quality time building relationships. If you’re using video calls just to get through a presentation, your closing ratios are suffering. Franchise recruiters still need to offer discovery day opportunities, digitally or in person.
Digital discovery days need to incorporate opportunities for prospects to meet validators – existing franchisees who talk about their experiences. “Make it a point to do what you were doing pre-pandemic even if it doesn’t look the same,” emphasizes Seltzer. “Everyone who sells franchises successfully understands that it can’t be done without building relationships. It’s harder for prospects to talk to existing franchisees today, but they need to do that to build a relationship. Give them that opportunity digitally.”
Bottom line: ask more personal questions; try to discover what’s motivating your prospect and then see how your opportunity can meet their needs. Don’t sacrifice the relationship for time. Invest the appropriate time with each prospect. Granted, less-than-serious or under-qualified prospects do not deserve as much time.
Polish your digital storefront
Improve your online presence. In recent months there’s been an increase in face-to-face meetings. Eventually, most sales presentations once again will occur face-to-face at expos, at private meetings, and at discovery days.
But the online aspects of sales, especially those that make the process easier, won’t go away. Lead generation is now almost exclusively an online experience. Face-to-face meetings aren’t likely to occur without an online introduction. Live expos are returning to the marketplace, but they’re not going to overpower online lead generation.
You must make sure “all your marketing materials and your media are produced for the online marketplace,” explains Marfleet. Re-examine your website. The content needs to utilize the tools that facilitate lead generation. Franchise prospects aren’t just looking for the next expo; they’re using search engines to find opportunities they can pursue immediately.
Bottom line: the pandemic changed behaviors. Your website needs to attract prospects long before they’ll even consider meeting you by phone or in person.
Gather leads strategically
Be prepared to talk to more candidates per sale. You can easily generate or buy online leads but you’ll need more leads per sale. For years recruiters said they needed 100 leads to close a sale on average. Now they’re talking about 150 to 200 leads especially if the leads are initiated online.
If you’re looking for the portal that generates the most leads at the lowest cost, you’re going to work even harder to make a sale. “Portals are now going wild with leads,” comments Austin Titus, who oversees Network Lead Exchange for UFG. “But it’s harder to convert those leads. Getting the attention of a lead generated on Facebook, for example, is much more time-intensive. Many of those leads are not qualified. They come from people who are bored or who are thinking about possibilities but with no real qualifications, such as investment money.”
“Bottom line: people are more curious today about franchise ownership than they have been in a decade”
Many of the unemployed benefited from government subsidies so the motivation to spend money and start a business was not real. On the other hand, Titus says he’s bullish on phone verified leads and buys them regularly. “There are companies that generate leads from executives who are looking to get into their own business and these companies spend time qualifying the leads by phone before they sell the lead. Those leads are usually worth the investment. The phone qualified lead will cost much more than the portal lead, but it’s worth spending the extra money.”
Titus said he can spend $3,000 and get a huge quantity of Facebook leads but the quality will be poor. He can spend $1,000 for fewer phone verified leads, but quality will be high.
Bottom line: when it comes to leads, you get what you pay for.
Get your hands dirty
The best leads are the leads you generate yourself. Almost every franchisor spends less money today closing sales than what they spent pre-pandemic. Travel came to a standstill. There were no fees for expos. There were no opportunities to buy airfare and hotel nights for candidates to participate in your discovery day, which is what UFG has done for years.
These savings were a gift of the pandemic. However, these savings can be an opportunity to re-channel at least some funds into lead generation. “Due to the pandemic,” recalls Austin Titus, “we made the decision to generate our own leads. And those leads have proven to be our best leads.” Using a third-party vendor with digital expertise, “we invested heavily in our websites and in digital marketing to get prospects to visit our websites.”
Closing ratios still aren’t what they were prior to the pandemic, but Titus says they are inching closer as a result of better quality leads.
Bottom line: Spend money to capture leads that are most suited for your opportunity. These leads will be easier to close.
Dr. John P. Hayes, CFE, is the Titus Chair for Franchise Leadership at Palm Beach Atlantic University, home of the Titus Center for Franchising