Controlled Growth Key to Success for New Franchise Concepts!

Working with entrepreneurs exploring franchising as a business expansion strategy, I’m often asked the question, “How does a new franchise company sell franchises without brand recognition?” Here are my thoughts…

Initially, the founder is the brand. It’s his or her passion for the business. It’s how he or she treats customers and employees alike. It’s how the business is promoted within the local market. Not just through typical advertising efforts, but through solid grassroots, organic efforts.

The initial franchise candidates are actually the “low hanging fruit” of the original business. These are the customers that inquire whether or not the business is a franchise and how they can learn more about owning their own. Most are interested because the business appears to be thriving and they’ve seen the owner (founder) time and again, always smiling and shaking hands. Public Relations efforts should ensure this occurs.

They admire the owner a great deal and will base their decision to open a franchise location, on the potential of establishing a relationship with the owner. They’ll compare the opportunity to other franchises and justify to themselves that they’re in on a ground floor opportunity with a direct line to the founder. As such, they feel their probability of success is greater because their location will be in the home office city and if they need help, they could easily approach the founder and the home office because of the proximity to their franchise location.

Ideally, the next few franchisees will also be in the same market as the original business and the first franchise location. It’s prudent to only expand locally until critical mass is established in the market, ad cooperative is developed and support systems are perfected. Now the concept is ready to expand outside the initial market.

However, it is often financial suicide to entertain requests from candidates all over the country. Instead, development efforts should be concentrated on one or two cities relatively close to home office city. For instance, if original business and home office is in Houston, the natural progression would be to promote the opportunity next in San Antonio/Austin and Dallas/Fort Worth areas.

As these markets start to become established with franchise locations, it’s advisable to promote the concept in another two or three areas. Maybe, explore another “hub” and “spoke” scenario. Let’s say, Atlanta as the next hub.

Expansion efforts should be the same as they were in Houston and expansion out of that market shouldn’t occur until Atlanta has a critical mass. Then, when that occurs, the opportunity could be promoted close by in Nashville and Charlotte. Now, you see the spokes of national expansion beginning to form.

While this is going on, maybe inquiries start coming in from the San Francisco area. So, the next phase of expansion might be in the Bay Area. The Bay Area becomes another hub, and once developed, the franchise opportunity could be promoted up the road in Portland and to the East in Sacramento and the process continues.

It’s all about controlled growth and the founder exhibiting tremendous restraint in expanding too fast and in areas far away from his core group and subsequent hubs to be able to provide ample support, create ad cooperatives and build the brand geographically. Chances of franchise success are far greater at all levels of the franchise organization within the parameters of a controlled plan of development.

So, to answer the often-asked question directly, I suggest everyone in the system having a clear understanding of the founder’s vision and if it includes anything but a controlled development plan with his or her firm commitment to actively participate in the franchise sales process, the chances of selling the first ten to twenty franchises will be a frustrating, monumental task that most likely will fail miserably.

Franchise Sales: A Tale of Two Theories

franchise_salesA couple of years ago, there was a discussion in the Franchise Executives group on LinkedIn with the posted question, “Who is using outside franchise sales groups [brokers]?”

Below are some interesting responses from group members that are not franchise consultants or brokers:

An experienced franchise executive stated:
“Why wouldn’t you develop your own small sales group? Using a service that sells multiple franchises diminishes your quality control to some degree. I have been a part of 2 franchisors for 25 years and neither has ever used any of these groups and we have had lots of success. What are you trying to achieve by using these”groups”? Lower cost of acquisition, less hassle, expecting more leads, more foot soliders?”

The president of a national franchise concept wrote:
“We do not work with an outside group. In talking with our prospects it seems important to them to know that our development staff are part of the company and experts on the concept they are selling. We even have a dedicated sales team for each concept. My advice is to talk with some of your new franchisees to see if it would have made a difference in their decision making process.”

A franchise attorney posted his response:
“…if you use an outside broker in the true “sales” role, they can lose credibility if they appear detached and not knowledgeable about what they’re selling (often happens when your brand is only one of many in the broker’s portfolio). That should factor into your due diligence process when you’re looking at outside brokers. But when the relationship stays between the franchisee and the sales person, the prospect’s going to be let down when that sale is done and the sales person is on to the next prospect. Besides, I always wanted my sales person’s relationship with the prospect to taper off once the sale was done – the franchisee’s relationship should be with someone on the development then someone on the operations team. Two points – first, I always caution my clients to use brokers more as “matchmakers” rather than “salesmen.” What should really “sell” the franchise is not the sales person (internal or external) or the broker, but the confidence that the prospect has in the brand and in the ability of the management team; and, second, if my clients use outside sales people, I always make sure the outside sales team attend the same training I give my client’s internal team and do so at the same time. That way the outside sales folks get entrenched into the company’s culture, they know what to expect from management, they see how to use management to “sell” the franchise, and they know what management expects of them.”

A Vice President of a national franchise concept went on to write:
“For a variety of reasons I’m personally a big believer in building sales teams from within the company. But then again I’ve had the luxury of working for established franchisors and had resources to either develop salespeople from within the company, or rely on referrals to hire from outside and train them to become franchise salespeople. Both methods take time – generally about 12 months for a franchise salesperson to really “hit their stride”. Many franchisors don’t want to wait that long, or can’t wait that long, or don’t know how to train franchise salespeople. In those situations it may make sense to bring on outside franchise sales groups.”

So, that’s what franchise professionals were saying a couple of years ago… but what about today? Please, let us know your thoughts!

Franchise Sales Process: Consistent or Flavor-of-the-Month?

Occasionally, I take a look at some of my posts from a few years back just to compare my thoughts and perspective from then to now. I always ask myself if I’m consistent so as not to confuse anyone. But more importantly, am I focused for the long-term or for just the here-and-now. Well, below is a post from June 2009. I’m sure you’ll agree that I have been consistent and have not jumped on any flavor-of-the-day bandwagon… It really is about fundamentals and best-practices!

Franchise Sales During the Recession

WSJRecently, in one of the franchise groups on LinkedIn, there was some discussion about the Wall Street Journal article, “Franchise Sales Pull Back During the Recession.” Several franchise professionals posted their comments and, of course, I added my “two cents” as well. Okay, I was definitely long-winded compared to the others, but as most of you who read my articles are well aware, I have a passion for franchising and franchise success and tend to go on and on to share the same with all who will “listen.”

“I too, believe there are many well-qualified candidates exploring franchising. Some as a career alternative, and also, in the case of already being a small business owner, as a business expansion strategy and/or an income diversification plan.

No doubt, the number of overall franchise leads has diminished quite a bit. But I believe many of the “tire kickers” have gone by the wayside while the more qualified candidates continue to search, inquire and ultimately decide franchising is right for them to achieve their goals and objectives. However, in order to fully realize this trend, one must realize that the candidates’ approach has evolved.

Today’s qualified franchise candidate is more sophisticated, educated and technologically advanced than we have ever seen before. Add to the mix, a sense of extreme caution, and their process in exploring franchising and specific franchise opportunities has become more of a detailed, well-thought out strategy.

Always understanding that there is risk in any entrepreneurial endeavor, today’s candidates explore franchising because it may provide even the slightest edge against failure. Their mantra has become, “failure is not an option” and they now live it by doing everything humanly possible to dot every “i” and cross every “t” and then rechecking only to do it over and over again until they have full, complete confidence in their decision.

To that end, the overall process from initial inquiry to franchise award is much longer than in years’ past and that is something franchisors must be prepared to effectively handle. It’s a primary reason I believe social media works so well in the new era of franchise sales as it creates an environment for today’s candidates to research organizations, share information, communicate with individuals at all levels of the franchise organization from franchisees to corporate executives, view photos, audio and video, etc. And, they can do so at their own pace and to their full understanding. That is the key.

Understanding and adapting to today’s qualified franchise candidate will help franchisors ride out this current economic downturn. Putting their heads in the sand and just complaining about the poor economy and the franchise candidate pool drying up will only incorrectly prove true that their negative thoughts are correct.

All that being said, certainly there are challenges in securing financing and other variables that must be contended with and addressed accordingly. But as the franchise candidate pool diminishes and many of the tire kickers aren’t around to waste our time, we should now have more time to explore all options, use our creativity and innovation, network beyond our comfort zones and seek out alternative solutions. I believe those solutions are out there and many are capitalizing on them as we speak. They will not only survive, they will thrive as others have done in other recessionary periods.”

Are You a Franchise Seller?

On the surface, it doesn’t appear to be too difficult to determine whether or not one is a franchise seller. Yet, I hear time and time again the same rationalization and justification as to why a person feels they are not a franchise seller. I hear about trading off the candidate prior to the sale, only qualifying the candidate until the franchise salesperson actually talks turkey with the candidate, and just recently, I was told, about presenting the candidate with three options but the candidate is not sold anything. Does anyone REALLY believe this crap?

So, to eliminate the confusion as to what being a franchise seller entails, I refer back to The Franchise Seller’s Handbook by Warren Lee Lewis. Here’s what Warren has written in this fine publication, right in the first section, Introduction: Making Legal Franchise Sales

A Franchise Seller

If you are an officer, employee, representative or broker involved in the offer or sales of franchises, you are a “franchise seller.” As a franchise seller, you can use [the handbook] to help you make legal sales.

Your involvement in the offer or sale of franchises may be obvious, such as if you are a salesperson actively pursuing franchise prospects for a franchisor, are signing agreements with new franchisees, or are accepting payments from new franchisees. Or, your involvement may be less obvious, such as if you are participating as a finder or consultant in discussions with prospects about their business interests, pre-screening prospects through questionnaires, recommending franchise options, or assisting prospects in completing franchise application forms. In either case, you are involved in the offer and sale of franchises, making you a franchise seller.

Still confused? Well, I highly recommend you print a copy of The Franchise Seller’s Handbook by clicking HERE. And, be sure to read it sooner, rather than later. If you’d like a hard copy, just let me know and I’ll be sure to get you one. Of course, as supplies last!

This post was originally published on this site July 2010, but still relevant today with minor revisions made to the original post.


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Franchise Growth or Future Problems?

After what many franchise professionals claim was a tough couple of years, franchising seems to be gaining momentum once again. This is very encouraging news! But, franchisors must be prepared, not only to handle the increase in inquiries, but in working effectively with today’s franchise candidates who many have indicated are more diligent and cautious than ever before. Many of today’s candidates are voluntarily or involuntarily unemployed, soon to be unemployed, or, may just want to control their own destiny, and are approaching business ownership with the attitude that failure is not an option. In dealing with these candidates, it is essential to exercise extreme diligence in presenting the franchise opportunity all the way through to executing the franchise agreement, and beyond.

I know, many franchise professionals are probably thinking they already do that. Besides, it’s the law to fully disclose the opportunity, right? They’ll go on to state they’ve always done things by the book, at all times. Blah, blah, blah! It really doesn’t matter what was done in the past, how it was done, or why it was done. What matters is that the opportunities that present themselves today and in the future receive timely, diligent attention, at a high level of professionalism, in order for a transitioning corporate executive / business professional to even consider a company’s franchise opportunity. And, if they ultimately do sign the franchise agreement, remit the franchise fee, and commit to investing a substantial sum of money, rest assured these new franchisees will expect and command a high level of accountability from the franchisor, and from the system itself. From themselves? Not likely as they will rarely blame themselves for any part of failure. But they will hold others accountable.

Well, my fellow franchise professionals, it’s time to press those conservative suits, study your franchise documents, fine-tune your operations, and examine and perfect your franchise sales process as any shortcomings will surely raise their ugly heads in the future if today’s new franchisees become dismayed, discontented, and or fail in their businesses. They will not hold themselves accountable. Instead, they will blame the person who “sold” them their franchise, or the operations department that they perceive to have provided little or no support, or the franchise executive that they feel showed no compassion in “forcing” them into paying royalties and advertising fees.

So, why did I turn what started out to be a positive of increased franchise interest after a year of disappointing results, and turn it into a picture of potential problems complete with gloom and doom? To encourage and motivate every franchise professional to be on his or her A-game and to put their house in order. Not only to bring new franchisees and revenue into the system, but to continue to grow their system with franchisees that, when attaining a relative level of success, will refer new franchise candidates, validate the franchise system, and possibly look to purchase additional locations in the future. The alternative of course, is dedication of resources to dispute resolution, and possible litigation. Remember the old Fram oil filter commercial? You can pay now, or pay later!


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Franchise Sales Myth Uncovered

The following was actually a discussion initiated almost a year ago in several of the Linkedin franchise groups. I am reposting the same as I believe it is still relevant and appropriate today. The discussion was originally started by franchise veteran, Joe Caruso. As many that participate within LinkedIn groups know, Joe is an active participant in discussions, providing direct answers that are well-supported by his extensive knowledge of franchising and his practical solutions to challenges facing the franchise community today.

Have you met the Magical Itinerant Franchise Sales Pro?

You know, the legendary rolodex-carrying franchise sales guy that can sell Board Stretcher Franchises to Carpenters. He’s the elusive guy everyone wants to supercharge their company’s franchise sales. All he needs is a phone and his massive rolodex. How does he do it…well he uses a mix of Alec Baldwin’s Glengarry Glen Ross A-always, B-be, C-closing style, the tenacity of a Danny Devito in Tin Men and Ron Popeil’s silver-tongue infomercial delivery.

No one can resist the siren call of The Magical Itinerant Franchise Sales Pro’s pitch. Once delivered, this pitch renders the prospect incapable of saying no and asking what is the maximum number of franchise commitments he can buy. Once The Magical Itinerant Franchise Sales Pro has sold-out all the territory, he moves on to the next franchise company with an even more massive rolodex in hand to do it all over again.

Well most of us know that The Magical Itinerant Franchise Sales Pro is a myth. But how many of us have been asked if we know a Magical Itinerant Franchise Sales Pro?

Great franchising starts with a financially compelling concept that has strong unit economics, a strategic development plan, focused lead generation and a carefully crafted sales process that ensures best-fit franchisee selection. The idea that somehow a franchisor can fast-forward to a happy ending by short-cutting their way to building a durable, sustainable and successful franchise system is unrealistic. It takes more than a dream of success and a Magical Itinerant Franchise Sales Pro.


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Franchise Sales During the Recession

WSJRecently, in one of the franchise groups on LinkedIn, there was some discussion about the Wall Street Journal article, “Franchise Sales Pull Back During the Recession.” Several franchise professionals posted their comments and, of course, I added my “two cents” as well. Okay, I was definitely long-winded compared to the others, but as most of you who read my articles are well aware, I have a passion for franchising and franchise success and tend to go on and on to share the same with all who will “listen.”

“I too, believe there are many well-qualified candidates exploring franchising. Some as a career alternative, and also, in the case of already being a small busines owner, as a business expansion strategy and/or an income diversification plan.

No doubt, the number of overall franchise leads has diminished quite a bit. But I believe many of the “tire kickers” have gone by the wayside while the more qualified candidates continue to search, inquire and ultimately decide franchising is right for them to achieve their goals and objectives. However, in order to fully realize this trend, one must realize that the candidates’ approach has evolved.

Today’s qualified franchise candidate is more sophisticated, educated and technologically advanced than we have ever seen before. Add to the mix, a sense of extreme caution, and their process in exploring franchising and specifc franchise opportunities has become more of a detailed, well-thought out strategy.

Always understanding that there is risk in any entrepreneurial endeavor, today’s candidates explore franchising because it may provide even the slightest edge against failure. Their mantra has become, “failure is not an option” and they now live it by doing everything humanly possible to dot every “i” and cross every “t” and then rechecking only to do it over and over again until they have full, complete confidence in their decision.

To that end, the overall process from initial inquiry to franchise award is much longer than in years’ past and that is something franchisors must be prepared to effectively handle. It’s a primary reason I believe social media works so well in the new era of franchise sales as it creates an environment for today’s candidates to research organizations, share information, communicate with individuals at all levels of the franchise organization from franchisees to corporate executives, view photos, audio and video, etc. And, they can do so at their own pace and to their full understanding. That is the key.

Understanding and adapting to today’s qualified franchise candidate will help franchisors ride out this current economic downturn. Putting their heads in the sand and just complaining about the poor economy and the franchise candidate pool drying up will only incorrectly prove true that their negative thoughts are correct.

All that being said, certainly there are challenges in securing financing and other variables that must be contended with and addressed accordingly. But as the franchise candidate pool diminishes and many of the tire kickers aren’t around to waste our time, we should now have more time to explore all options, use our creativity and innovation, network beyond our comfort zones and seek out alternative solutions. I believe those solutions are out there and many are capitalizing on them as we speak. They will not only survive, they will thrive as others have done in other recessionary periods.”

Franchise Lead Generation via Social Media

The following article about franchising and social media is being reposted with permission from its author, Christine Mudd, Founder of Frandeavor, a franchise development company dedicated to growing franchisors through effective lead generation, in-market franchise sales, and real estate assistance. Christine’s article reinforces many of the principles discussed in franchisEssentials recent series Franchise Development via Social Media.

unicornI Sold A Franchise To A Unicorn
as Posted on Frandeavor Blog April 29th, 2009

I sold a franchise to a Unicorn. Yep, last week I closed a lead that was generated from a blog posting: AKA: Social Media. We’ve all heard stories of mythical leads generated by “free” postings on blogs and social sites, but until last week I hadn’t actually seen one.

If you are like me, you’ve got your twitter account, Facebook fan page, linkedin profile, but how do you convert these medias into active live leads?

1. Make sure your website is rock solid. All social media efforts point in one direction, straight back to your website. As a result, your franchise offering needs to be clear, easy to navigate, and compelling. Don’t waste one dime or one minute on social media until your website is powerful enough to convert any traffic into a lead.

2. Social Media is not free. You need a staff member and a brand champion to lead your social media efforts. This person needs to be a skilled writer, fluent in the language of social media, and they need to be an authentic FAN of your brand. You need to pay for their dedicated time in executing your social media plan. Don’t assign your social media efforts to the intern or the receptionist; assign it to a key member of your team.

3. Know your target franchisee. You’ve got to know everything about your target franchisee. By identifying where your target prospect shops, listens to music, and gets their news and hobbies, you can easily target the right blogs and social sites to engage in conversation.

4. Finally, be authentic. The great thing about social media is that it’s the people’s media. It’s not sponsored by Coke, or littered with pop ups. Social Media is like-minded people sharing ideas on a given topic. As a result, if you post a sales pitch or canned response readers will see right through it. Be passionate, be relevant, and you’ll become a member of the community.

Christine Mudd joined the franchise industry in 2000 as an Executive with Quiznos Sub. Since that time, Christine has worked in all aspects of franchise development including brand expansion and lead generation, franchise sales, real estate, and construction. Christine held many positions with Quiznos Sub including Vice President of Development and Vice President of Non-Traditional Development and Operations. In March of 2008 Christine founded FRANDEAVOR.

Social Media to Franchise Sales: Fantasy or Reality?

Let’s assume you’ve followed the advice and quidelines in the first three segments of the series on Franchise Development via Social Media. You’ve established your “Virtual Meeting Room” as a Facebook group page and requests to join are submitted everyday. Customers of your franchisees are joining and posting comments about how much they enjoy the experience at the franchise locations. Franchisees have posted some testimonials that really do complement the Founder’s video about his passion and vision for the business. You’re even surprised at how many corporate and franchisee employees have participated and posted comments and photos. All-in-all, you’re proud of the Facebook page and proud of the effort put into developing and maintaining the page.

You’re now looking at you’re social media strategy and you preview the company blog. You feel the content may be all over the board, touching on franchise development, expansion into the Southeast, a new franchisee in Santa Fe, community activity at the franchise location in Seattle and even an article submitted by one of your franchisees about one of his long-time customers, but then you stop a realize how much this menagerie of topics, text, graphics and photos portrays the true face of the franchise concept. You make a note to have your social media administrator issue a press release on just that thought.

twitter imagesA quick review of Twitter puts a smile on your face as you see the number of people following the concept increasing everday. Then you recall the blog stats revealed a sharp increase in visits from Twitter. Wow, there’s a positive trend here we need to watch. Come to think of it, you’ve noticed an increase in franchise inquiries and wonder if there’s a correlation here. You then look closely at the new people following on Twitter and you backtrack to the company’s recent posts and discussions in several LinkedIn and Facebook groups that just so happen to consist of educators, and realize many of the new franchise inquiries have educational backgrounds. Hmmm, you decide to cross-check the names against LinkedIn profiles and smile again as you notice they’re members of LinkedIn, are in the specific groups you’ve targeted, and many have actually participated in the group discussions where the social media administrator posted some very interesting discussions about careers after teaching and about moms returning to the workforce or exploring career alternatives. It sure is coming together.

You note there are some qualified candidates frequently visiting your Facebook group page, checking out the same information repeatedly and posting specific questions about your franchise opportunity. You’ve even noticed some candidates posting comments about the customer testimonials and some personal messages about the Founder’s video. Now what? Certainly this social media thing isn’t magical that it’ll actually close a few franchise deals, right?

personaltouchJust like you’ve integrated traditional marketing strategies with social media strategies, you need to be integrating personal interaction as well. However, instead of an aggressive, focused sales approach, the interaction should be subtle and guiding. Use the social media tools to make your points and make the experience enjoyable and interesting. Your candidates will most likely marvel at the new technology and feel comfortable learning about the technology AND the franchise concept. And yes, they’ll be more comfortable with you and be fully at ease working through disclosure and the finer points of the concept itself.

The rest comes down to guiding your candidates towards making a decision as it will now fully be an informed decision that has been validated by the social media experience AND the franchisees the candiates have contacted. Hmmm, your franchisees actually feel more part of the franchise sales process than ever before. You smile again as you realize it did make the process easier than in the past. Yes, it’ll be very nice to achieve your franchise development goals once again. Maybe next year, you’ll actually exceed them!

Fantasy or Reality? Achieveable or Not? Easy or Hard? That’s up to you and your team. It comes down to personal accountability, diligent execution of your strategy and plan, professional handling of franchise candidates at all times and above all, NO SHORTCUTS!

Personal accountability is necessary in monitoring your social media activity, updating blog content and keeping things fresh. Nobody will stay at a dull party, right? Putting off things for tomorrow that should be done today is just not acceptable. It becomes a reflection of how you handle even the simplest things and the a lack of urgency and poor attention to detail will translate into how you’ll handle the franchise sale and ultimately, your franchisees.

Diligent execution of your strategy and plan is essential. Certainly, you’ll make adjustments along the way. But your plan is your roadmap. Follow it as closely as possible. Allow extra time and resources as necessary for roadblocks and detours, but stay on course. Monitor your progress. How fast did you get from point A to point B. How fast did a candidate get from point A to Point B? Is the process slowing down or speeding up? Why? Do you need to do some system maintenance to the social media vehicle? Maybe your videos aren’t playing correctly? Maybe the photos aren’t laoding fast enough? Maybe it’s time to bring in a technician so you can get back on the road as quickly as possible?

Professional handling of candidates means working with each candidate as you would want to be worked with and treated if you were the one on the verge of making a substantial investment, maybe putting your life savings on the line! It means converying a sense of urgency when asked for information. It means paying attention to detail in something as simple as pronouncing their name correctly all the way to something complex such as full disclosure of the franchise concept. And, it means having the right attitude and conveying the same at every moment of working with the candidate at every point of “contact” including by email, on the phone, in-person, and yes, in the virtual world. Keep in mind, at all points of contact, your attitude will shine through so make sure it shines bright and your franchise future will shine bright as well!

Thank you for travelling with me on this exciting, eye-opening journey. It will be an experience you should be able to relive everytime an individual expresses interest in your concept. At that point, it’s time to smile, focus on the resources you’ve invested, the time you’ve dedicated, and the vision and passion you had when you first started in franchising, and share it with your candidate just as you would share your life with a new addition to your family.

If you have any questions or comments, please feel free to submit them in the space below. If you would like to contact me directly, my email is segreto.paul@gmail.com. In any case, I will respond promptly.

Local Franchise Lead Generation Q & A

question-mark3aA few months ago, there was a discussion in one of the LinkedIn franchise groups about local franchise lead generation. The discussion was initiated by a franchise professional specializing in franchise sales and consulting. As we have done in the past when posting comments from a social network discussion, we will identify the individuals that submitted comments according to their social network profile.

The discussion opened with the following post:

Ideas for Lead Generation Sources. Anybody have suggestions for local lead generation? Looking for ideas from zors, zees, consultants & brokers on how to generate leads local to a specific area.

Here are some of the responses that were posted including my own which just so happened to be the initial response:

“[Name], I usually explore social networking groups specific to the area such as the inHouston LinkedIn group if I’m trying to generate leads in the Houston area. This type of group is realtively easy to target and expand beyond based upon member recommendations and suggestions. Work the crowd as if you were in a room.

In addition, I focus on networking groups that include individuals that best fit my franchise candidate profile. From there I drill down to individuals in the local area. Let’s say teachers fit my candidate profile. I would search out networking groups spefic to teachers, education, etc. I may participate in discussion groups to get a feel for the group and to be recognized within the group. There’s always a spin you could use. Next, I seek out members from the specifc area I’m targeting and communicate what I’m trying to accomplish. It’s been amazing how many times I’ve wound up with a candidate in California that is willing to jump at an opportunity in Texas. It happens.

I also focus on groups that can provide me with referrals such as insurance agents, realtors, financial planners and attorneys. Again, if you’re proactive within networking groups it’s realtively easy to enlist support and gather information.

Lead generation through online networking takes time and effort no doubt. However, once you’re proactive within the groups, you almost windup with a snowball effect as the leads come in bunches. Some leads start out as simple as posting a thought provoking discussion, some back and forth interaction with a responder and the responder saying,”what is it that you do?” Next thing you know, you’re discussing an opportunity and the door is wide open.

Most times it takes considerably more effort but I’ve found people are networking online and participating in discussion groups for a reason. They’re all looking to expand their business, improve their position, seek out opportunities and make money. It sure beats running an ad in the local paper and waiting for the phone to ring.”

An executive of a national franchise concept responded as well.

“Other sources of local lead generation include – classified advertising, seminars, the local business journal, and chambers of commerce. I also use industry specific sources (trade publications, trade associations) depending on the franchise. My favorite is PR. If you can can a story published at a local level – it tends to generate a good deal of buzz.

As you are finding – it is a bit more challenging to put together a local or regional campaign, than it is to promote a national effort.”

A franchise executive of a national foodservice franchise concept posted the following:

“I like to target existing multi-unit operators of non-competing brands in the same industry. For example, if I am selling full-service restaurants, I would seek out multi-unit fastfood operators in the area. Or if I was selling windshield replacement franchises, maybe I’d target muffler or brake franchisees in the area. Get your hands on some UFOC’s that list franchisees by state. It’ll give you the franchisee’s name, address and phone number and you can go down the list contacting the owners. You must size up the target market to your product. For example, you probably wouldn’t have much success targeting Subway franchisees for a TGIFriday’s franchise, as it’s a big leap from a $50,000 investment to a $3 million investment. But maybe the Subway UFOC would provide good leads for someone selling Baskin Robbins franchises. Get the idea? Last thing, by focusing on existing franchisees in someone else’s system, those prospects already understand franchising, know that fees are due and payable weekly, understand they must operate according to the franchisor’s standards, realize they must undergo training, particpate in the marketing co-op, etc. Hope this helps.”

Next, the foodservice executive and I exchanged the following comments:

Me: “[Name], excellent points. I utizilized a similar strategy with great success. Other key factors include the current franchisees’ knowledge of franchising and their lender’s knowledge and experience with the franchisee may be just the edge needed to secure financing in today’s tight credit markets.

Foodservice Exec: “Paul, you mention an important point in today’s economic market. Successful existing franchisees should already have relationships with lenders who have seen them perform over time. A well-funded prospect is worth his weight in gold! Any contracts that are “contingent on financing” may as well be thrown in the trash, as lenders are not willing to take the risk with an unknown, untested, unproven franchisee.

Me: “I absolutely agree with you. Just the mention of a brand new candidate exploring a franchise concept without the candidate having any experience sends a lender running for the hills. It really doesn’t matter how proven the franchise brand is and how long it’s been around. To that end, I see primary growth in franchising coming from current franchisees looking to diversify their business portfolio, adding new revenue streams and streamlining redundant expenses.”

It was an interesting discussion and I believe several good ideas and thoughts were presented. I know the information reached an audience that did not actually participate in the discussion because I received over thirty emails from individuals asking me to expand upon my responses, and those of the other participants. In addition, we shared ideas and thoughts, and discussed our own experiences. I’m proud to say that I also learned a few things myself. Proof again of the benefits of social networking!