Franchise Sales and Franchise Development Post COVID-19
During a Franchise Growth Mastermind leadership conversation with Nick Powills, of 1851 Franchise, Joe Matthews of Franchise Performance Group, and Michael Haith, CEO of Teriyaki Madness, we discussed franchise leadership, development and sales – both today and in the future as our nation builds and recovers from the COVID-19 pandemic. The strategies, ideas, and advice that was shared reaches to the highest levels of actionable franchising best practices and, in many ways, a recommended and necessary paradigm shift for the future of franchising.
The following is a summary of the best practices that we discussed:
Franchisors Need to Adapt and Change to a Franchisee Driven Value Proposition
Whether this change is necessitated by the seismic impact of the COVID-19 crisis or is something that was long overdue to happen, everyone agreed that too many franchisors are operating without the right mind-set and franchisee value proposition. Winning franchisors and franchise systems need to shift from a franchise sales mindset to a franchise recruitment mindset and franchisors need to place 100% focus on the value proposition that they offer their franchisees and developing a franchise offering focused on what what a franchise buyer will predictably want.
Some of the concepts for reevaluating the franchise opportunities and franchise development, included:
- Focusing, when applicable, on asset light and real estate light franchise opportunities;
- Focusing on franchisee value propositions, the franchisor’s brand story, and the multiple content streams for communicating those stories;
- Selling franchises with a dedicated focus on replacement income;
- Recognizing a potential shift where more traditional entrepreneurs may be drawn to franchising vs independent ownership;
- Consider franchise relationships that may be more in line with operating partnership models like chick-fil-a.
Lead Flow vs Deal Flow
In a market where many franchisors are witnessing a dramatic drop in the volume franchisee leads many are nevertheless reporting potentially better deal flow with higher quality. That is volume may be down but quality and potential future franchise sales may be up. Overall, franchisors should refocus their franchise develop away from volume lead flow to lower volume but higher quality deal flow. To do this Franchisors need to refocus their franchisee value proposition focused on franchisee profitability.
Industry Shift Focused on Attracting Entrepreneurs
As many have witnessed the value of franchising, franchise ownership and franchisee support vs independent ownership during this crisis, now is the time for franchising to expand its reach to America’s future entrepreneurs. In the past, individual minded entrepreneurs did not consider franchising – they started their own businesses. With a redefined focus on franchisee value and profits an opportunity exists for the franchise industry to expand the base of available future franchisees.
There were many more insights that were shared – hope you enjoy the video and conversation.
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By Charles Internicola April 1, 2020
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