Red Boswell talks with us about how to generate franchisee leads. This is one of the hottest topics with franchisors. This discussion will benefit both new and seasoned franchisors.
Red is a unique character, and I mean that in a good way. This guy has been driven to make money ever since he was a kid. Starting in grade school when he was selling NFL pencils for a profit, into hos twenties when he build up a pet services franchise system? all the way up to 148 units. He?s been operating in the world of franchising practically his entire adult life. He?ll give us more details in just a few minutes.
Red now gets to fuel his business building passion as President of the International Franchise Professionals Group (IFPG), The World?s Largest and Most Respected Franchise Consultant Organization.?.
Red Boswell Intro
Get to know Red Boswell
Topic Segment ? Generating Franchisee Leads
TOPICS DISCUSSED IN THIS EPISODE:
The cost of a lead
The average cost of a lead in 2019 is $10,000
That number does not including commissions
That number includes large companies that don?t need to spend anything for leads because their brand is so well knows that they don?t need to advertise to get leads
Small companies usually pay a lot more to generate leads since their concepts usually don?t have any brand recognition
16 sources of leads
Consumer / Clients
Industry / Conversions
Live events / Expos
Mobile / Roadside
Upgrade / Multi-unit Operators
The marketing mix is a moving target and is different for every concept. There is no silver bullet, one size fits all solution for the marketing spend mix.
Do a lot ? do it for a long time ? test and measure
Every option will involve one or all of these three
The trick is to utilize the options that require the resources you have the most of.
Red?s Favorite Five
Red says that every solution must be customized to the individual concept, but if he HAD to pick his favorite five, the would be:
Best option for any size franchisor
You pay to be a member then pay a commission per close
Many broker groups won?t accept smaller start-up concepts
Big saver of time and resources
Hire a PR firm
Find one who is familiar with the world of franchising
IFA members a plus
Validate with their past clients
Converting existing business people who are struggling
You never know who may be disenchanted with operating their own concept and who would love to convert
These are cold calls usually
Live Events / Expos
Usually between $5k and $10K per event
Use common sense and work it hard
Energy ? follow-up ? is key
You could make online all five
PPC Pay per click / Banners
SEO of your own franchise site
Develop a GREAT portal that grabs and tracks leads and conveys the information well. Portals tend to generate? a lot of volume with lower quality, but still worth the spend
Social media posting
Big data targeting
Job boards ? make a job advertisement? with the tag ?some investment required? ? describes a dream job
Bonus Source: Guerilla Marketing
Example: flyers on every windshield at the local franchise expo
Common mistakes made by franchisors as it relates to lead sources:
Lack of infrastructure ? be able to walk away from your business for 6 months
Don?t try to run your business and franchise it all by yourself
Franchise Development person
Onboarding / Training person
Field support person
Lack of good ops manuals
Not charging enough for the franchisee fee in order to pay for the costs associated with lead generation and other expenses
Negotiate a broker commission too low ? nobody will show your system if the commission is too low
Lori Kiser talks about how to best utilize a franchise broker consultant company. Everybody wants to know how to find the path to granting more franchises, and in this episode we definitely talk a lot about that. We will discuss what is a franchise broker consultant, how to make your business ready to utilize their services, and how to effectively work with them once you have hired them.
Lori Kiser Intro
Get to know Lori Kiser
Topic Segment ? How to work with Franchise Broker Consultants
Quickdraw Questions plus the first time ever Lyrics Quiz
Topics discussed in this episode:
Franchise Broker Consultants are not business consultants in the traditional sense of the word. They specialize in producing qualified, vetted leads for franchisors.
A franchise broker consultant is not part of the sales team of the franchisor. They will not take the prospect through the franchisor’s sales process, though they will stay involved as the candidate passes through the process.
In order to be successful with a franchise broker consultant, a franchisor must have the following already in place and running within their concept:
An in-house franchise development staff (sales team)
A well-defined sales process
The ability to go beyond the generic 6-step sales process, and know how to learn and understand the prospects dreams, desires, and business goals
Unit economics that are positive and consistent
A leadership team with a solid understanding of franchising
A typical start-up franchisor is usually not a good candidate for a franchise broker consultant group because the broker consultant is paid based on successfully bringing a prospect that eventually signs a contract with the franchisor. Because start-up franchisors typically don’t have the infrastructure in place to handle the lead volume, broker consultant groups are less likely to accept them as a client.
How to take your startup system and get it ready to be accepted by a broker consultant group:
Create a specific landing site for franchisees. This will demonstrate to the broker consultant group that you are knowledgeable and organized, and that you have a place to start a new prospect so that they don’t fall between the cracks once the prospect is delivered to the franchisor.
Create a sales process that works for your team and track the performance of the sales process and the development team. If you can?t prove that you can successfully close a prospective franchisee then a broker consultant group is not very likely to burn good qualified and vetted leads with your system.
Be able to show GREAT unit economics ? meaning, be able to show that the franchisees are making money.
Demonstrate that all of the existing franchisees will validate well. Know that all of the franchisees are happy and that they will sell that happy story to a prospect who makes the validation calls.
Demonstrate that the franchise system has all (most) of the amateur mistakes out of the way so that the franchise broker group?s brand won?t be tarnished by referring leads to the franchisor client.
Have an FDD that is registered in al of the required states so that the franchise broker consultant will not be limited by geography. Similarly, be ready to offer and close franchise deals nationwide, including developing a nationwide support group to service the new franchisees.
Demonstrate that your system can handle the stresses of sales volume, such as being able to build out a location for multiple new franchisees while simultaneously walking a second set of prospective franchisees through the sales process, AND manage all existing franchisees at the same time. This requires a team that is in place and seasoned.
A typical franchisor broker consultant will sift through over 100 candidates before they find one that is worthy of passing on to the franchisor clients.
The Franchise Rule does apply to a franchise broker consultant, although the broker consultant shouldn’t be doing any selling of the specific system.
Once a franchisor is able to join forces with a franchise broker consultant group, what is the best way to manage that relationship?
Think of the broker consultant as a talent scout, scouting players for your team
The franchise broker consultant will act more like a brand ambassador to the candidate.
Since the franchise broker consultant already an established relationship with the candidate, the franchisor should trust and utilize the candidate’s information from the broker consultant when the franchisor is brought into the relationship.
Be open to adapting to the processes, nomenclature, personality, and style of the franchise broker consultant group, as well as to the type of candidate that they typically generate
There are different types of consultant groups as well as different types of consultants within each of the groups. You will likely only work with a handful of consultants within a consultant group. That is normal.
The best franchise broker consultants are not as enticed by your commission dollars as they are developing their referral network. These consultants rely heavily on referrals from happy candidates who eventually convert to franchisees. While it is important to pay consultants a fee that is competitive, understand that they need to like you and believe that your system is successful before they burn good leads on your system.
Nick Gugliuzza of Empire Business Brokers shares with us his knowledge and experience as he teaches franchisors what to look for in a franchise brokers, what to expect from a broker, and how a franchise broker can help any franchisor efficiently achieve their growth goals.
Did you know that Niagara Falls dried up once, and Nick was there to witness it? Did you know that Nick was drafted by a major league baseball team? Did you know that Nick was almost alligator food once? All of that is in this episode as well.
Podcast Segment Timestamps:
03:13 Segment 1 – Get to know Nick
28:20 Segment 2 – How to select a franchise broker
How to Select a Franchise Consultant with Jerry Darnell
“How to Pick a Franchise Consultant” is the subject of this podcast. Kit Vinson talks to Jerry Darnell, CEO of Jerry Darnell and Associates, and he asks the questions that every start-up franchisor has, “Do I need a franchise ocnsultant, and if so, how do I pick one”
We also spend a little time learning all about the man behind the company. Jerry Darnell is a pretty interesting guy and it was a pleasure getting to know him better.
Jerry Darnell talks about what a franchisor should be looking for when selecting a franchise consultant to help them grow their business.