Some businesses are tailor-made for franchising. Alas, selling your first franchise is much more difficult than you might think. Potential franchisees are usually worried about returns or don’t have enough proof of concept to make the transaction.
The best way to address these issues is to create a comprehensive sales strategy. By implementing a long-term promotional plan, you’ll be able to address all the concerns that potential buyers might have. Among other things, the right strategy helps you find the right sales specialists and optimizes your marketing budget.
1. Strike at the Right Time
Timing is vital for franchisers. You must ensure your company is in a good spot to enter the franchising market and start offering its service to potential clients.
Ideally, you want to assess your financial performance before making the move. “You’ll also have to streamline your marketing, accounting, and legal operations,” according to Franchise Fastlane, one of the biggest franchise sellers in the US.
2. Set Aside a Hefty Budget
Franchisors must have a well-developed marketing strategy in place before offering their franchises to outside parties. A good rule of thumb is that you should spend at least $150,000 to promote your concept to the general public.
We also recommend that you optimize your investment during the development phase, ensuring you put enough money into recruitment. It is vital that you diversify your sales processes to ensure maximum profit.
3. Establish Differentiators
Differentiators give potential customers “Why” when deciding whether or not to buy your franchise. During this process, not only should you identify things that make your business unique, but you should also analyze the competition to see how they’re differentiating themselves.
With a thorough SWOT analysis, you’ll determine your strengths, weaknesses, opportunities, and threats. Create the company’s mission and vision, and share your motivation for being in the business. Even if there’s seemingly nothing that makes your company unique, find a way to make yourself stand out from the competition.
4. Invest in First Franchisees
Most businesses use various freebies and discounts to incentivize their first customers. You can do something similar with your initial franchisees by offering them operative and logistical support. Make sure they have a good headstart, as this will help promote your concept and allow it to scale.
5. Pursue Your Goals Aggressively
Speaking of scaling, you must have an expansive mindset. Invest most of your profits back into the business instead of paying off dividends. Furthermore, you should think about getting several loans to support your growing marketing and sales efforts.
It is also recommended that you accept accountability for your business’s successes and failures. You have to be realistic about your current position on the market so you can introduce necessary improvements to your operations.
6. Focus on Organic Growth
Many companies are trying to force their brand onto potential franchisees. In reality, this process usually occurs organically, through word-of-mouth and slow relationship building.
It is crucial that you find partners that are a good fit for your brand. You shouldn’t only be worried about selling as many franchises as possible but also finding franchisees who share your mindset. That way, you’ll achieve more cohesion throughout the entire chain.
7. Use Multiple Promotional Channels
You never know which medium your potential clients use, which is why you should promote your brand through as many channels as possible. Aside from the traditional format, you should also consider various digital channels such as SEO, social media, paid ads, and influencer marketing.
By testing multiple channels, you’ll discover which tactics are best for your particular business model. The use of omnichannel marketing is also vital for boosting brand awareness across the board and setting your business up for long-term success.
8. Monitor Performance
While your main goal is to sell as many franchises as possible, that doesn’t mean you should neglect franchisees’ performance. Each one of your partners should be heavily profitable to justify their investment. Otherwise, you’re risking a PR disaster.
Your franchisees should make at least a 15% return on investment (ideally, they should reach 20% ROI). If one of your partners is struggling, you should provide them with the necessary support even if that affects your own profits.
9. Hire Veterans
Hiring regular marketers and sales reps isn’t good enough if you want to make your business a success. Instead, we recommend you hire people who specialize in franchising. You need to find people who have experience with financial planning and budgeting for franchises and those who know how to sell to potential franchisees.
Conclusion
Running a franchise business is very complex. You must create a well-defined system that will streamline your legal processes, marketing, and logistics. We also recommend you hire specialists who have extensive experience selling and marketing these types of brands. Once you cover your basis, find a way to differentiate your company from others, incentivizing potential franchisees to work with you.