In the UK it seems that the standard procedure for a newly set-up franchise brand is to book a stand at a franchise exhibition even though the majority of new brands will find it difficult to recruit their first franchisees through a show.
Shows can end up costing up to £10,000 for decent stand space, stand ‘dressing’, printed promotional materials and time so to not achieve a result should be unthinkable.
Much as I support some of the shows, I would like to understand why franchise development consultants continue to recommend that new franchisors (who have usually just spent tens of thousands on consultancy fees just to get to the recruitment stage) invest so much money launching at a show when they don’t appear to have a large recruitment budget!
Surely the more sensible approach and advice to them would be to set a realistic 1st year target, agree sensible overall recruitment budgets (to included advertising, marketing, PR, systems and personnel) based on those objectives and then decide where it would be best to apportion that budget to keep thing affordable and still achievable.
I would always suggest new brands with low budgets seek the low cost, easily measurable and easily amendable form of lead generation through established online franchise advertising portals.
The money saved by taking this approach should be invested in either working with an experienced franchise recruitment consultant, or in setting up good in-house systems and processes to receive and handle leads as they are generated.
If this whole process is managed well, then you will be able to generate a flow of leads to match your budget and fit your objectives.
If anyone has a good argument or disagrees with this view (apart from the show organisers themselves!), I would love to hear from you…
I was at the BFA Franchisor of Year Awards on Thursday night to see TaxAssist just pipped to the post by Countrywide Grounds Maintenance amidst the usual pumping dance music accompanying those honoured to the stage!
Andrew Quail, the head of business services at the BFA, had spoken during the annual conference about the issue of whether or not a franchisee could also be called a franchise owner, as there was a suggestion ‘franchise owner’ could be the franchisor…
As an independent franchise consultant specialising in franchisee recruitment, and ensuring that the process and decisions are fully informed from both sides, I take a somewhat liberal approach to this subject dependent on the brand I am working with, the profile of the person they are trying to attract and my own judgement based on the people I am talking to.
The word, ‘franchisee’ can invoke emotions of subjugation for those individuals who view franchising more as a partnership than a hierarchy. Business coaching and consultancy franchises are a perfect example of a sector where I would use the term ‘franchise owner’ to describe a franchisee, and where the franchisor in many cases would rather refer to their franchisees as consultants or coaches rather than franchisees.
For people simply looking for a job type franchise with no real potential to employ staff and grow beyond that, the term ‘franchisee’ fits much more closely, because that individual is effectively just an employee within his own franchise business.
My thoughts are that, until franchising becomes a fully regulated and more closely controlled industry in the UK, like it is the USA and Australia, these kind of debates will be largely irrelevant.
If you are looking to invest in a franchise and you have narrowed the field down to a few, and you have started to schedule visits to those brands, there is one important question you should ask, which, if asked in the right way, will tell a few truths.
It is very important to ask the following questions in the order given below…
- How many franchisees have you got currently? (make sure you write this down)
- How many resales have you had in the network? (make sure you write this down)
- How many franchise agreements have been signed since you started? (make sure you write this down)
If this information cannot be given to you there and then, make sure you get answers to these questions as all franchisors should be able to provide this detail if they want to.
The reason for those questions is to find out how many franchisees have failed since the start without actually asking the question, and the the formula for that is:
Franchise Failures (FF) = Total number of Franchise Agreements ever signed (TFA) minus [the number of Franchisees Trading (FT) plus the number of Franchise Resales (FR) in the network]
FF = TFA – (FT + FR)
The answers you get will sometimes really tell a story and you make your own judgements based on that.
You could of course just ask the franchisor: “How many franchisee have you had leave the network without selling their business (i.e. fail)”, but by doing it in the way I have described above will really tell you if they know, or care, or are willing to get you the information…
I spent Friday last week at the franchise expo in London. I have been to this show for the last 5 years or so and my first impressions this time was that there was much more space than in previous years. The explanation, it seems, is that there were less exhibitors than usual, which could reflect the current economic climate.
Managing to avoid accepting all the pieces of marketing literature offered to me by slick salesmen types and scantily clad ladies, I had a good walk around meeting with a number of companies we have a business relationship with – things don’t change much with these shows..you see the same faces and it is all very ‘same, same but different’ – a common phrase heard in Thailand when you ask the market vendors why you should buy off them rather than someone else with exactly the same wares.
I spoke to one of the show’s marketing guys when the doors had closed that evening, and he seemed very optimistic on the numbers of people who had come through the door – it had seemed rather quiet to me and I challenged him on this but he was adamant that they had hit their target numbers, but would not commit to what they were… Quite a number of franchisors I talked to said that their stands had been pretty quiet throughout the day but they thought it would be busier on the Saturday. A couple of others said that although numbers were down, quality was up, so a bit of a mixed bag.
The stands which had been most busy were the franchise solicitors as they had dealt with a good number of potential franchisors seeking to sort out their franchise agreements and so on.
Saturdays are usually reserved for the family day out and becomes a bit of a free for all, so suited business types and serious contenders ensure they are available to go on the Friday, which is exactly what I did.
As I stood on the packed/delayed 9pm train back to Norwich from London Liverpool Street, I had a look around and had the thought that not even 1% of the 100 or so people packed into my carriage were involved in franchising in any way, even as employees..and this is biggest problem franchisors in the UK face – there is a such a limited pool of people that understand and are looking for franchise opportunities, compared to the 1,000+ franchise brands seeking franchisees, that those brands that achieve their recruitment objectives often have very big budgets, or extremely successful recruitment strategies…
