How to Sell Franchises to Qualified Franchisee leads
When it comes to building a thriving franchise system, finding ways to connect with qualified, well-capitalized franchisee candidates is critical.
But how can new franchisors develop great leads that will convert to a network of like-minded, ambitious franchisees? The answer lies in the steps they take early on to generate leads. By adopting the right mindset, differentiating their franchise from the competition, and utilizing the resources available to them in smart ways, startup franchisors can lay a sturdy foundation for lead generation – and franchise sales – for years to come.
In this article, we’ll explore the secrets every franchisor needs to generate leads and successfully scale their franchise system, including:
- Start from the beginning – and keep potential candidates in mind at every step
- Think of your franchise offering as a product
- Build a great website that converts
- Own your status as an underdog in the franchise industry
- Prioritize well-qualified franchisee candidates
- Utilize online lead-generation resources
- Develop genuine relationships with franchise brokers early on
- Be strategic and deliberate in your recruiting efforts
1. Start from the beginning – and keep potential candidates in mind at every step
A common misconception that new and emerging franchisors have when it comes to franchise sales and lead generation is that prospective franchisees are already aware of their brand and leads will simply come flooding in once their Franchise Disclosure Document (FDD) has been issued.
In reality, franchising is a highly specialized industry that requires hard work and smart outreach efforts to succeed. Because owning a small business is vastly different from running a franchise system, new franchisors should be prepared to start from scratch with an understanding that they’re entering an entirely new industry in which they have little experience or brand recognition.
“I think the start is understanding that, while you might have the next greatest brand – the next Orange Theory, the next Massage Envy of your industry – even if you do, the end user does not know that yet. You've kind of entered the big leagues now and you're competing with all of the other franchises. … You're gonna have to really grind and work and work at it to get [your brand] story out in the first few years,” says Dan Claps, a serial entrepreneur in the franchise space and host of The Franchise Founders Podcast.
For franchisors looking to hit the ground running, Claps says starting with the right mindset – and a decent amount of humility – can make a difference when it comes to lead generation and closing deals with those first few franchisees.“
Go into the franchise lead generation side as humbly as possible, knowing that you're basically starting at zero when you first start, as far as your brand recognition on the franchise level, not the consumer level,” Claps says.
2. Think of your franchise offering as a product
For new franchisors looking to generate high-quality leads early on, an important part of having the right mindset includes thinking about their franchise system not only as a business but also as a product to be sold.
“You really, as a franchisor, need to sort of turn your franchise offering into a product that you're selling. … I believe everything – whether it's a service, whether you're selling franchises – everything needs to be built as if it's a product on a shelf with clear value,” says Charles N. Internicola, a franchise attorney with over 25 years of experience and the founder of The Internicola Law Firm.
A key part of making sure the value of a franchise offering is clear to prospective franchisees is telling a compelling brand story – something Internicola says franchisors should focus on as they grow their brand organically during their first year in business.
“So many franchisors don't even focus on their story. And I'm not talking about something that's abstract or fake. But they just jump into the franchise market like, ‘We're a gym, we're a restaurant, and here's what we're going to promote. You pay a 6% royalty.’ … What is that story and how does that fit in with that end user, that franchisee candidate?” Internicola says.
By making sure prospective franchisee candidates can clearly and easily understand what a brand is about from their first point of contact with it – that is, its history, mission, vision, successes and other unique factors – new and emerging franchisors can attract candidates that share their brand’s core values and that will be committed to its ongoing success.
3. Build a great website that converts
To ensure their franchise offering is easily accessible – and discoverable – to prospective candidates, franchisors should focus on building a professional stand-alone website that communicates their brand story while differentiating their offering from competitors – including processes, procedures, benefits and support available to franchisees – while capturing leads and converting them into future franchisees.
“[Candidates] don't know your story. They don't know all the great things that you're doing inside. I think franchise sales websites, as a part of that story, should be talking about that process and procedure,” Internicola says.
To differentiate their franchise system from others in the industry, Internicola advises new franchisors to emphasize their brand story and identify at least three factors that make their offering unique – topics that are covered in The Internicola Law Firm’s Brand Story Masterclass.
By creating a high-quality website with content that conveys their brand story in engaging and memorable ways, franchisors can reach potential candidates and generate leads across multiple channels including internet searches, social media and more – something that can benefit franchise systems of every size and budget.
“No matter what our budget is, we want the money we're spending to have enduring value. So if we create engaging videos and engaging content, those videos are going to work for us not only this year but multiple years as we build up,” Internicola says.
4. Own your status as an underdog in the franchise industry
When it comes to converting leads to franchise sales, sincerity is everything – especially for new and emerging franchisors.
“Where I get frustration, where I see brands not getting traction, is you need to be genuine,” Internicola says.
Often, franchisors are tempted to follow the lead of larger, more established franchise brands – something Internicola expresses reservations about. Instead, Internicola advises startup franchisors to position their brand for success by leaning into the qualities that set their small brand apart from large competitors. This often includes emphasizing the high levels of support made available to franchisees and promoting the ways franchisees’ lives can be improved through business ownership.
“I think there's a way to demonstrate that underdog status and how it wins. I think you’ve got to put substance behind it in terms of, hey, here's our technology solution. Here's our coaching structure, here's our whatever – and you're not going to get that with the bigger brands,” Internicola says.
5. Prioritize well-qualified franchisee candidates
When it comes to franchise sales, new franchisors should keep in mind that not all leads are the same. By focusing on well-qualified, properly capitalized franchisee candidates that share their goals and values, franchisors can build a strong foundation for their brand early on. Often, that process involves prioritizing candidates that have a track record of success in their previous careers.
“When you look at the average executive who wants to transfer their skills into owning a business – which I think is the best franchise candidate, especially for an emerging brand – I know they have a proven track record of managing people and managing process. They're typically professional, they work in a team. They have retirement funds saved up and good credit. They've had a stable career so far, so they make great new franchise owners,” Claps says.
Still, Claps advises startup franchisors to make sure franchisee candidates are a good fit for their franchise system no matter what their background might look like. Often, that involves making sure a candidate actually wants to become a business owner – a step that is sometimes overlooked by new franchisors during the lead generation and sales process.
“I think this is something that people kind of miss a lot of times – before you sell them on your brand, sell them on, or help them decide, if they want to be a business owner in general,” Claps says.
Once a candidate has confirmed that they want to be a business owner, Claps advises franchisors to explain the benefits of their brand and the ways franchise ownership can positively impact the franchisee candidate’s life and help them meet their goals.
“You could take an approach of, ‘Hey, we get it, it's not easy to decide if you want to be a business owner. Let's talk through that first. Then, if so, we can explain the benefits of our brand.’ I think that'll go a long way with these candidates when they're early in your funnel,” Claps says.
6. Utilize online lead-generation resources
For franchisors looking to generate a fair amount of leads early on, valuable resources can be found online – often with the click of a button.
“If you go onto social media or portals, or any of the great lead generation businesses out there, I would start there. One reason you want to start there is you're going to learn what you're missing,” Claps says.
Although the quality of the leads generated on platforms like franchise portals or social media communities can vary, Claps advises startup franchisors to stay diligent about continually seeking out leads on those platforms – even if the process might seem tedious.
“It's the reality of lead gen if you're in franchising – legal, if you're in couches, I don't care what you sell – you’ve got to have leads coming in. Some are going to be great and some are not going to be great,” Claps says.
Because franchise portals offer an opportunity to learn what lead generation is all about – for better or worse – they can give new franchisors important insights into the industry and what it takes to succeed when it comes to franchise sales.
“Another reason [to use portals] is, again, you're learning, you're figuring out what you like or don't like. Or you might say, ‘Wow, this is really hard and I can't believe brokers do this all day long. And I should really figure out how to get in with the brokers because they are very special,’” Claps says.
7. Develop genuine relationships with franchise brokers early on
Although working with franchise brokers might not be an option for new franchisors that haven’t already landed their first few franchisees, it’s still important for startup franchisors to engage with brokers early in the franchise process.
“Good franchise brokers create good value for franchisors and franchisees,” Internicola says.
Because franchise brokers can play an integral role in introducing franchisors to high-quality franchisee candidates over time, Internicola advises new franchisors to join a broker group six months after launching their franchise system.
“In the first two years, I'd still be focused on organic [growth], but the reason I recommend joining the broker group is to build your franchise IQ, honor the process, see what [brokers] care about. Start seeding the relationship. I also tell [clients] I don't expect them to have deals from brokers right away unless you're very unique – but let's start building the foundation,” Internicola says.
“When you're looking to buy a franchise, sometimes you could feel alone, right? And that alone feeling – that's where I think the value certainly comes in when working with franchise brokers,” Internicola says.
Claps agrees that franchise brokers can be an excellent investment for emerging franchisors, noting their importance in helping smaller brands compete with more established franchise industry giants.
“Let's assume the brand is a great brand and they have all those boxes checked. So I would say, number one, get into the broker networks. And make sure all of your content, your videos, your collateral is engaging. Again, you're in the big leagues – you're competing with lots of big, big brands. So make sure you spend that energy and time,” Claps says.
While more mature franchisors (and those with higher budgets) should focus on investing in sponsorships, advertising, and going to conferences to network with franchise brokers in person, Claps advises startup franchisors to focus on relationship-building.
“Take the time with the brokers to do something special. So again, especially if you can't do option two that I mentioned, financially – which I totally get when you're starting out – then invest in relationships,” Claps says.
When it comes to building relationships with brokers, Internicola stresses the importance of being well-informed about your franchise system. By knowing the details about your business, including its Item 19 financial disclosures, startup franchisors can build trust with franchise brokers – a critical factor for connecting with quality leads further down the road.
“Where I cringe sometimes is where a franchisor goes, ‘Yeah, I'm just gonna offer the broker more money,’ and I'm like, whoa, wait a minute. You’ve got to understand the broker is a small business owner that is spending his or her dollars every month for lead gen, then building out the team to qualify these leads. And they need to know when they refer someone to you that the experience needs to be so great that if they don't want to buy your franchise, they're going to come back to that broker,” Internicola says.
8. Be strategic and deliberate in your recruiting efforts
Although lead generation can sometimes feel intimidating for new and emerging franchisors, much of the process comes down to finding the right marketing and sales strategies that work for your brand, including developing a sales process that works to convert leads into franchisees.
While deciding whether or not to hire a public relations firm to craft custom advertising campaigns often depends on a franchisor’s budget and goals, Claps says there are some important steps all franchisors can take at the grassroots level to grow their new brand, even if they can’t afford to hire a PR agency or franchise company right away – including talking to the people they already know about their new franchise system to get the word out.
“I would run around, I would go to my customers, I would take my customer database and I would promote the franchise opportunity through email through marketing,” Claps says. “... Then I would take time and do podcasts like this. It's amazing if you get on other people's podcasts and you keep doing podcasts.”
For franchisors that choose to utilize PR agencies to promote their brands, Internicola advises new franchisors to focus on developing campaigns that advance their brand story – a strategy he believes is more likely to generate quality leads.
“I like the PR that's advancing the brand story – like building that story arc for the exact point you're making and what we discussed earlier, which is every dollar you spend has to be multi-purpose,” Internicola says.
To learn more about accessing our Brand Story Masterclass, click here.