Biggest Mistakes After you Franchise Your Business
After years of success…you focus your passion and energy on franchising your business…
You hire a franchise lawyer and development team, you work on your FDD, systems, and Operations Manual. Within a few months you launch your new franchise, enter the franchise world, and are ready to grow your brand.
So what happens next?
For many, at least initially during the first two years, they experience excitement, followed by disappointment and franchise fatigue. Attracting and recruiting qualified franchisee candidates is not as easy as others have made it out to be and, overall, you may feel misdirected and in need of a plan to clarify a successful roadmap for your brand.
If this is how you feel then your not alone and you’re probably suffering from one or all of these 3 mistakes:
1. You’re Relying Too Much on Outside Vendors
Sure you need a good support team – lawyers, franchise PR, accounting, marketing, etc. – but success requires that you immerse yourself in the franchise world, learn franchise sales and development, and hold your partners accountable.
Don’t just assume that the advice you’re getting is the right advice. Investigate and evaluate what works for other franchisors and how to strategically and cost-effectively sell franchises to the right candidate. Choosing the lowest cost vendor may end up being the most expensive decision you can make and a slow road to nowhere. Doesn’t mean you need to waste money either, but equip yourself with the right information to evaluate what you need to be spending and who you should be spending it with.
2. You Haven’t Developed Your Brand Story and Digital Validation
The biggest mistake start-up and emerging brands make in the first two years of franchising is that right after they franchise they start spending money on digital ads, portals, and other marketing channels without first putting in the hard work of defining and positioning their brand story.
This mistake happens for many reasons but the biggest reason is that it’s hard! Consider the following questions – do you have a clear and concise answer to each of them:
(a) What is unique about your franchise brand and what differentiates you from the competition?
(b) How can buying your franchise transform the lives of your franchisees?
(c) Why is your franchise one of the most compelling opportunities right now?
If your answers revolve around industry standards like “we support you,” “our training…,” “proven systems…,”, or generic statements about the overall industry, i.e., “the ______ industry had 1 Billion dollars in sales” then your getting your brand story wrong. Think about it. If you are asking a franchisee to invest his or her livelihood, savings and time with your franchise system, what are the compelling reasons why he or she should be trusting you? Once you have answers to these questions you’ll tell your story through your franchise sales web page, social media and third-party media. You need to tell a story of transformation.
3. You’re Not Investing Enough Capital
The industry standard is that, on average, you should budget between $10,000 to $15,000 per franchisee that you recruit and on-board. That means if you want to sign 10 new franchise agreements this year you should be budgeting $100,000 to your franchise sales marketing. If you are not spending these types of amounts – that’s ok, but you will need to realign your expectations and resist the urge to spend / waste money on inefficient marketing channels and systems that will just take your dollars, churn leads, and result in wasted time and minimal deals.
Even if you have the available capital – if you haven’t developed your brand story – you need to pause your development efforts and get your brand positioning right.
The good news is that you’re not alone and, when done right, franchising works. So now may be a great time to reassess your brand, implement corrective measures and energize your franchise growth story.
You’re not alone, join our free Franchise Growth Mastermind Community and join other like-minded franchisors and franchise professionals in sharing best practices and what works in franchising.
By Charles Internicola February 25, 2021
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