7 Lead Generation Factors to Consider for Your Franchise

The following excerpt is from franchise expert Mark Siebert’s book Franchise Your Business. Buy it now.

While having a strong message is important, it is meaningless unless you have an audience to whom you can deliver the message. Franchise sales rarely happen by accident. And while an occasional serious prospect may just wander in your door, most franchises are sold because a franchisor executes a marketing plan designed to attract that prospect.

Our affiliate, Franchise Dynamics, sells literally hundreds of franchises a year, year after year, for concepts that have included restaurants (Newk’s Eatery), weight loss (Medifast), shelving retrofits (ShelfGenie), home renovation (101 Mobility) and even indoor trampoline parks (Sky Zone).

Related: Considering franchise ownership? Get started now and take this quiz to find your personalized list of franchises that match your lifestyle, interests and budget.

In each case, the success of their sales efforts was directly related to their marketing plans. In selling some 1,500 franchises over the past few years, Franchise Dynamics had to process more than 100,000 franchise leads—and those leads did not just happen by accident.

In order to give you a baseline for the best chance of success, keep these seven factors in lead generation in mind.

1. Budget

The first step in creating your franchise marketing plan involves setting a budget. Defining an appropriate budget is almost always a balancing act between goals and available resources.

When I ask my clients about goals, however, I find that many business owners simply haven’t given the subject much thought. They often respond with vague platitudes about “aggressive growth without sacrificing quality” or suggest they would like to open a stated number of units without having considered all the factors that go into making that decision.

The best way to develop your growth strategy is to set a long-term goal (exit, business value, cash flow, etc.) and time frame (five years), translate that goal into a hypothetical business that can achieve it (100 franchises paying $30,000 a year in royalties, for example) and work backward to a more specific short-term objective (selling 12 franchises in the first year).

After creating growth goals using these kinds of measures, the franchise marketing budget can be developed based on industry averages. The annual franchise marketing budget can be arrived at simply by multiplying the desired number of franchises to be sold by the assumed marketing cost per franchise.

2. Geographic markets for expansion

One mistake we see again and again involves new franchisors starting their process with a national franchise rollout. Often, their initial expansion is serendipitous: they get a hot lead from Timbuktu and decide they should pursue it. Frankly, it is easy to spot a franchisor that has not benefited from professional advice just by looking at their location strategy. If they have locations all over the map, chances are they are being opportunistic and unfocused in their marketing efforts.

Many of these franchisors suffer from the misconception that there are a limited number of franchisees in any given market and if they do not take advantage of every opportunity, it will never happen again. Unfortunately, that strategy is very likely to come back to haunt them.

The truth is that franchisee prospects are not in short supply. When you are ready to go into a new market, they will be there — as long as you know how to find them. If a franchisor adopts a reactive approach to isolated candidate leads in remote markets, it’s also unlikely that they’re pursuing the best candidates in that market. Focused lead generation within targeted markets will generate more leads that the franchisor can qualify to determine the candidates who will best represent its brand.

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3. Mix and distribution of corporate locations

Another factor you must consider will be your mix of franchise to corporate locations. For many new franchisors, the best course of action is to put the further development of corporate locations on hold as they get established as a franchisor. This approach allows you to learn the business of franchising and concentrate all your resources and efforts on this new business. Of course, if your short-term plans involve both franchise and corporate expansion, you should account for that in your marketing planning—especially when it comes to your location strategy.

There are several location strategies you can employ if you go this route:

  • The Home-Sweet-Home Strategy. One would be to reserve markets that are “close to home” for corporate locations while franchising in more distant markets.
  • The Spiking Strategy. A spiking strategy involves opening locations in distant markets that will serve as a showcase for future franchise efforts and a hub for support.
  • The “Cherry-Picking” Strategy. If you were to opt for a cherry-picking strategy, you would reserve either the prime markets or the prime locations within those markets for yourself.
  • The “Reverse Cherry-Picking” Strategy. While we have not seen this often, the reverse cherry-picking strategy is employed when a franchisor is asked to take subprime locations as part of a package that includes prime locations.

4. Narrowing your market

One of the most effective ways to improve your franchise marketing is to narrow your prospect profile. If your target franchise audience comprises the entire universe of franchise buyers, you will be forced to use a very general message to attract them. More importantly, you will likely need to advertise in general business or franchise publications, where you will be competing with many additional franchise opportunities. The franchisor should actively work to narrow the buyer profile as much as possible. While intuition alone can provide you with a starting point, the best marketers supplement their intuition with primary research.

Related: How to Determine Your Franchise’s KPIs and Achieve Profitability

5. It’s a numbers game

While it is almost a cliché, it is worth restating here. Sales, and in this case, franchise sales, is a numbers game. The more money you spend on franchise marketing, the more franchises you will sell. Franchise marketing dollars generate leads. A percentage of those leads fill out applications. A percentage of those will come in for meetings. And a percentage of those meetings will turn into franchise sales.

6. Timing

In developing your franchise marketing plan, you should be aware that timing will play a major role. For franchisors that do not have major issues with seasonality, the franchise marketing budget can be optimized by spending advertising dollars more aggressively at certain times of the year.

Generally speaking, franchise buyers go into hibernation in November and December. At that time of year, most of us are preoccupied with the holidays and are less concerned with making life-altering decisions. Likewise, there is a period of doldrums in the heart of summer, when prospective franchisees are more focused on family time and vacations than they are on buying a business.

The more complicated situation, of course, occurs when you are selling a franchise that is highly seasonal. Some businesses (lawn care, tax preparation, mall-based retail, Christmas lighting, driveway refinishing and mosquito abatement, to name just a few) have their own busy seasons. The seasonal franchisor is advised to account for this timing when developing its franchise marketing plan.

Related: Why Marketing Your Franchise Matters

7. The best plans are a mix of strategies and metrics

Marketing planning is, more than anything, the art of allocating scarce resources effectively across unlimited uses for those resources. And as you begin your efforts at franchise lead generation, chances are you will be confronted with a lot of conflicting information.

Public relations professionals will tout public relations. Print salespeople will tout their publications. Internet professionals will talk about the sheer volume of leads they can drive. Brokers will rightly tell you about how well-qualified their leads will be. As the saying goes, “When your only tool is a hammer, every problem looks like a nail.”

What’s more, all of these folks will be right. And, to the extent that they peddle the exclusive use of their particular lead-generation vehicle, all of them will be wrong.

The best marketing plans take into account several factors when allocating media dollars, including:

  • Historical performance of similar franchise concepts
  • Historical performance of franchises of a similar investment size
  • Historical performance of your franchise marketing efforts
  • The profile of the franchisee
  • The message
  • The size of the investment
  • The value proposition of the franchise
  • The complexity of the franchise (e.g., the need for more of a story)
  • The franchisor’s desired speed of growth
  • The franchisor’s budget
  • Seasonality
  • Franchisor growth goals

Related: These Are the Top 200 Global Franchise Brands in 2023

Franchise Your Business

Ready to grow your business? Franchising may be for you.

Expert franchise consultant Mark Siebert delivers the ultimate how-to guide to employing the greatest growth strategy in franchising. Siebert tells you what to expect, how to move forward and avoid costly mistakes as he imparts decades of experience, insights and practical advice to help grow your business exponentially through franchising.

Learn how to:

  • Evaluate your existing businesses for franchisability.
  • Identify the advantages and disadvantages of franchising.
  • Develop a business plan for growth on steroids.
  • Evaluate legal risk, obtain necessary documents and protect intellectual property.
  • Create marketing plans, build lead generation and branding for a new franchise.
  • Cultivate the franchisee-franchisor relationship.

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