Are you a business owner who is seriously considering to franchise your business? If so, read on – because we are fortunate to have a great opportunity for a Q&A with franchise marketing expert Christopher Conner, the President of Franchise Marketing Systems, one of the primary organizations that provide full-service marketing and sales support marketing to franchisors in all industries. Mr. Conner’s clients include Total Gym (Gravity), Blimpie, COSTCO, Allscripts, and Romeo’s Pizza.
Without further adieu, here’s the Q&A – enjoy!
Ivan Widjaya (Q): Mr. Conner – many thanks for the opportunity. Please kindly introduce yourself to our readers.
Christopher Conner (A): I’ve spent the last decade in the franchise industry working with several hundred different franchise systems in management, franchise sales and franchise development work. My experience ranges across all fields of franchise expertise with a focus in franchise marketing and franchise sales but includes work in franchise strategic planning, franchise research and franchise operations consulting.
I’ve worked with multiple International franchise and licensed organizations throughout the United States, Middle East, India and Europe. In these International expansion programs, I played a pivotal role in developing the program, putting together documentation and marketing franchises to Domestic and International buyers. Franchise Marketing Systems is currently working with several International companies in developing and managing independent distribution channels throughout the globe.
I have also worked with many diverse independent distribution systems including service franchises, sales franchise systems, retail franchise concepts, restaurant franchise systems, fitness franchise companies and several International franchise organizations.
Q: Business owners seem eager to franchise their business. But there are steps to take in order to make their business franchise-ready. What should a business owner do to make sure that they step into franchising on the right foot?
A: Franchising can be a really effective way to build a business, it provides the capital infusion, vested management through local owner operators and speed of growth that most small business owners want but can’t achieve on their own.
When I am interviewing business owners about franchising their model, I will ask some of the following questions which all are relevant for a business owner when considering this expansion model: How profitable is the business model – the Return on Investment needs to meet certain standards within an industry segment to be attractive to franchisees, what kind of track record can we show from your corporate units? Do you have a system in place for attracting new business and delivering your products or services? What market are we currently serving and how much opportunity do we see outside of this area for growth in your market segment? From a competitive standpoint, do you have a saturated market or are you a first mover for your industry and market? Once these questions have been answered, we can begin to get the concept ready for franchising and implementing the expansion model.
Q: Marketing and selling to potential franchisees are quite challenging, especially given the fact that prospects are often having false expectations in franchising in general. What should a franchisor do in order to market and sell effectively?
A: I love franchise sales – I think that this is the most fun part of the franchise business. What could be more exciting than helping someone learn and have the confidence to open, operate and start their own business and take control of their financial future? With that said, it is a challenge when a new franchise hits the market – getting the first ten franchises sold requires a lot of work. I suggest to business owners that they should account for somewhere around 150 franchise leads to close a sale, so there is a lot of frog-kissing to find the prince, but if you stick with the process franchise sales is very exciting.
My recommendation for effective franchise sales is define these three things and you can make it as a new franchisor – first, what is your value proposition – make sure that you are offering something that people want and that carries enough value to warrant your franchise fee.
Second, plan on a marketing and lead generation budget, you need to fill your pipeline with franchise candidates and this requires advertising. Luckily there are literally thousands of options to market a franchise with internet, PR, tradeshows and many other franchise lead generation options.
Lastly, have a sales team and process in place, it could be you as the business owner, but make sure you have the time to work the phones, email and follow up needed to close the sales – I have found that the average buyer takes about 6 months to close and somewhere around 30 contacts to get the purchase decision.
Q: I was a franchisee of a nationally-acclaimed franchise in my home country. Unfortunately, my franchise units went out of business due to numerous reasons. Not trying to point the blame to my ex-franchisor, but I think they didn’t stay true to their initial promise. What do you think a franchisor should do to make sure that they walk the talk?
A: Unfortunately, this kind of thing happens too often. Franchising is a business that is still largely composed of privately owned companies and businesses meaning that you have an entrepreneur who still controls the business and decision making. Much like governments being controlled by one decision maker, the wrong person in control can lead to a franchise brand running into trouble. I always recommend to franchise buyers to spend some time with the founder/owner of the franchisor and do their due diligence to figure out who they are doing business with.
So much of the success of franchisors depends on the owners ability and willingness to scale with growth. Franchisors must go through several stages of evolution to grow with the brand as a system develops from 10 to 50 to 100 units the responsibilities of the franchisor change.
My recommendation to a new franchisor is to be honest with themselves as to what their skill set is and who they are – many entrepreneurs are great at building a business, but need to hire management as the system scales, if you aren’t a good manager, plan on hiring staff as the franchise grows and you can scale with the franchise system successfully.
Q: What is your number one advice for business owners who want to franchise their business?
A: Franchising is a really aggressive expansion model with so many benefits when compared to company owned growth or other expansion vehicles. With that said, it is an expansion method that requires focus, planning and time. The successful franchisors I have worked with are business owners who understand the commitment that it takes to build a brand and are willing to invest into the process.
Franchising isn’t quick money, it isn’t a lottery ticket and it isn’t something you can do as a hobby. If you are going to franchise your business, commit to it and enjoy the ride as you scale and grow your brand through franchising.
Many thanks for your time, Mr. Conner!