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New decade brings new and unexpected challenges for franchise system growth

Thomas Scott, CEO and Founder, Brand Journalists

The International Franchise Association’s 60th annual conference in Orlando remains one of the most important yearly events for anyone working in franchising. This year’s record attendance came with a promise of what’s ahead for us in this new decade.

Franchising is growing; we are expected to add over 232,000 new jobs this year, produce almost half a trillion in GDP and we’re growing faster than the already hot U.S. economy. We estimate there are over 12 million people researching franchising and business ownership at any point today. It isn’t slowing down any time soon!

2020 arrived on the franchise industry’s doorstep with surprisingly little fanfare. The prior decade was one of massive change for the franchise industry, full of challenging and disruptive technologies, difficult economic conditions and the entry of two new generations of franchise owners into the franchise industry.

The 2010s were also an era of great growth where franchising matured and came of age. The number of franchise systems in the U.S. and Canada almost doubled in this period with almost one new franchisor starting up daily. Franchising is now the career choice of entire new generations and for millions of younger entrepreneurs, business ownership is now plan A, leaving a job as plan B.

As disruptive as the 2010s were for franchising, the 2020s are stacking up to be even more of a challenge. For companies that take the time to understand what’s ahead, these challenges could end up as massive opportunities to grow. The theme of this year’s record attendance conference is Franchising’s Future Starts with Us. Franchising’s future is here; the question is:

Are you missing what’s important to buyers today?

We’ve entered into unchartered waters – franchise buyers are not just getting younger; they have radically different expectations of franchise companies. They gravitate to brands that cater to their emotional needs, provide transparency and authenticity and look for cultures that allow them to collaborate. Technology is shifting – again – and the days of recruiters being able to email, or phone prospects are seriously numbered. Franchise buyers are not using Google – or websites for that matter – as much as they are using social networks and web apps. Getting in front of buyers and coming up with fresh, contextual marketing is proving to be far more difficult to execute.

Franchise broker networks are struggling; in a tight job market, their traditional buyer is getting pulled back into a job with little reason to pursue franchise ownership. This forces companies to think differently about development and try to reach buyers that broker networks can’t.

Here are some important takeaways we gleaned from this year’s conference, both from sessions, roundtables and fascinating conversations in-between:

Collaborative culture isn’t just a good idea, it is the only way to grow a franchise system in the 2020s.

Franchisors don’t know their culture or understand the impact of the culture they create are opening themselves to unnecessary problems and extra cost.

“everyone has a plan until they get punched in the mouth- Mike Tyson”

The conventional wisdom is out – for anyone starting, operating or restarting a franchise system, there is only one type of culture that really works: collaboration. The number one problem that forces young franchise systems to stall or fail is a basic one: they don’t understand the role collaborative culture plays in healthy system growth.

There are two styles of culture and leadership common in franchise systems:

Command and control – think the IBM, org-chart style of leadership. Someone at the top, layers to the person at the bottom. Top-down culture is cumbersome and info moves slowly.  Top-down culture lends itself to compliance enforcement and focuses on rules from the ivory tower and not the health of the franchise relationship. Command and control cultures are prevalent in franchising and it is a cancer! Of the past six emerging franchise chains we’ve worked with, 5 imploded or went off the rails because they couldn’t or wouldn’t let go of command and control leadership culture. It is the single most prevalent reason we see franchise systems fail.

If you think you are the expert – that franchisees can’t possibly know more than you, that this franchise system is your baby and the main reason franchisees buy your franchise is so they can follow a system, you are probably guilty of implanting a cancerous culture that will end up killing growth.


Collaborative culture – franchising at its base is a relationship. Talk to successful franchisors and they are close, personal friends with their franchisees. They work together on an equal playing field and collaborate on how to grow the business. Both parties prosper. The business case for building a collaborative culture franchise system is strong – a small franchisor can grow with 25% of the capital needed a command and control franchisor needs. Collaboration cuts costs and speeds up development. Collaborative culture franchise systems are simply higher performance because they focus on the relationship and give stakeholders – the franchisees – a major say so in operations, direction and system development. Franchising isn’t a democracy, but it needs to be much closer to an inclusive democracy than a totalitarian regime.

Here’s the checklist of collaborative culture takeaways:

  1. Form fast action, development or advisory committees with franchisees and home office staff. Meet often – weekly – and have these meetings replace your corporate staff meetings as much as possible. Don’t roll any initiative out unless the committee researches the ideas, agrees on the need and vets the idea. It isn’t the role of your home office staff to come up with systems – franchisees expect to participate in this as they are your most capable and most experienced subject matter experts. Committees made up of majority franchisees can make a HUGE difference in culture.
  2. Communicate in non-email methods. Email is also problematic and the worst possible way to communicate with your franchisees. Greg Nathan proposed that in a healthy system, you would communicate 6 or 7 times about a topic before you rolled it out in an email. Human communication – phone calls, conference calls, video calls, regional meetings, field visits – these are the ways you build solid collaborative culture. Lazy or inexperienced franchisors rely on email and email newsletters.
  3. Change is hard and with change comes loss. In a collaborative culture, you have to call out the loss, discuss it and be empathetic with your franchisees so they can grieve. If you don’t, you’ll get universal dismissal on your efforts and you’ll face fierce opposition. Just make sure to start with what’s going away before you roll your ideas out.
  4. Be willing to compromise! In a collaborative culture, be willing to step back and go back to the drawing board. You might not be on the right track!
  5. Encourage ideas from the field – in the main session Monday, the CEO of Kentucky Fried Chicken related how the first franchisee developed the red and white bucket and came up with the tagline ‘finger licking good.’ Your franchisees are your brain trust – listen to them and take their advice! Even if their ideas are different than yours, you’ll make happy, engaged owners by giving them a voice and listening to them.
  6. Lastly, don’t roll anything out without a business case. Because of its focus on relationships, franchising is an emotionally oriented business. Making a detailed business case with real data keeps the conversations focused on what really matters. You have to get the why and what’s in it for your franchisees or you won’t get traction. You can’t really ‘TELL’ a franchisee to do something, even with the backing of your FDD, and have things go smoothly. Business cases with transparent data helps franchisees sell themselves on the idea.

These sound like operations and leadership ideas and they are – we think they are the most important takeaway this year because without a collaborative culture, you won’t be able to grow or sustain growth. Franchisees work hard and if you implement a command and control culture, you’ll kill relationships with your pioneers, squash validation and create a tense franchise culture that puts franchisees and home office staff in opposition. In today’s emotionally oriented business environment, making real, authentic collaboration is a critical step to growth.

A franchise purchase isn’t an opportunity to follow a system, it’s a path for professional development

Best-selling author and thinker Simon Sinek gave an excellent keynote presentation this year on how to play the infinite game – focusing on the long term and growing a thriving business that has no real finish line. His big take away for many was to focus on younger staff at franchise companies and we think it applies to franchisees too.

Younger franchisees today are looking for more than a business to own. They don’t want to just learn a system or train for a job; they are looking for a path of professional development and a way to evolve as a businessperson and human being. Millennial and Gen Z buyers made up almost 35% of all buyers in 2019 and that number is going to increase dramatically this decade thanks to the sheer size of their generations.

These buyers have very different expectations for what they expect a career path to look like and when it comes to franchising, they are seeking mission and mentorship in a franchise purchase. The problem is most systems are focused on training a franchisee how to operate the basic business model, not how to professionally develop a young owner into a robust and capable business owner.

Without a path for professional development, these young owners will just do what they are famous for doing in the job market – ghost you. Be intentional about the path you create for young owners and they will reward you with loyalty and high performance. It isn’t that younger owners are slackers or lack the work ethic needed to succeed; to be successful and grow a franchise system in this decade you’ll need to create an environment they want to be in.

Franchise Broker deals down

Broker deals are down 12% in 2019 from 2018. The average company in franchising generated 1.7 deals from brokers in 2018 and less than 1.4 in 2019. Broker deals remain a viable source of deals for some brands and there is a place in the franchise industry for them. We talked to several high-profile brokers about this and they each responded with something very similar:

“We wish the job market would slow down – most of our best prospects are getting sucked into the job market.”

This is partially true – there is a historical connection to a tight job market and the number of people entering the franchise industry as franchisees. For some types of buyers – especially older, corporate refugees leaving career jobs and seeking income replacement – a tight job market competes favorably with franchise ownership.

We would say that the problem brokers and broker networks are seeing is more a reflection of poor or narrow targeting – focusing on the 50 plus year old corporate manager – than it is a sign on the economy.

We often intentionally avoid that type of franchise buyer in our lead generation efforts – we believe in targeting much more specific and often younger groups. People who are not as easily lured back into the job market. These days, that might mean much younger franchisees, ethnically diverse populations of potential buyers or targeting specific job types from industries in decline where a franchise solves a specific pain point and offers someone a better, more profitable path forward in their career.

Even if you have a solid value proposition for a prospective owner, if they are trying to replace a stable 200k a year income, few franchises can replicate that, much less make a low-risk option for this person. Someone who gets immediate income expansion or has some other critical pain point met will see a franchise as a much more attractive choice.

Sadly, until brokers and broker networks begin thinking differently about who they are targeting and why that person connects with the opportunity, we’ll continue to see more declines in broker sales.

Which brings us to our next takeaway:

Targeted, contextual marketing to specific types of franchisees is the new normal

Franchise buyers are not monolithic!

In our experience helping brands recruit over 10,000 new owners, few actual franchise owners start out simply unhappy in their job and decide to buy a franchise. That journey is a myth and there is little to no real data to back up the idea.

What we do see is specific groups of franchise buyers – we call them personas – relating emotionally to specific types of brands. These people might have a common pain point in their lives – such as the example Marcus Moura gave in his excellent session about why pharma reps invest in his Amada Senior Care franchise. In his experience, certain reps at certain companies are disillusioned with the industry they are in and home care offers a positive career change. They are not looking to get another job – they want out. A franchise opportunity that leverages their skills is simply a BETTER path. Targeting these prospects leads to higher quality conversations and a better fundamental fit.

Some examples of targeting today:

  • A carpet cleaning or flooring franchise might target realtors because they deal with home prep and are exposed to a constant stream of customers
  • An IT company might target copier salespeople because selling office equipment is a tough industry with little good news and those prospects have the skills to succeed at selling IT services to businesses
  • A plumbing business might target mid-level or area managers at an unrelated home services business such as Orkin or Terminix because those skills are easily adaptable to plumbing and the income potential is much higher.
  • Food franchises might target managers and operators from struggling corporate run chains because they can use their skills to step up to the next career level.

If you have a very specific audience you want to go after, the cost per deal is potentially lower because you are far more focused on specific conversations.

Who you target depends on your specific business and the industry segment you are in. Marcus is smart to target pharma reps because they have the skills a top-performing franchisee has.

Targeting doesn’t replace other forms of lead generation – most systems have 6 or 7 different personas they need to target. Some are broad, such as people who want to open a coffee shop. Some, like Marcus’ funnel, are more specific.

The takeaway is simple – you should be building personas of who your target franchisees are and making sure some portion of your franchise development marketing is focused on generating leads from each of the personas you target. As big data and marketing platforms have gotten more robust and detailed, you can now target personas on LinkedIn, Facebook, Adwords and in a variety of other ways.

If you just focus on broad marketing, you’ll likely miss out on some easier to convert franchise sales.

Time to Take Younger Franchise Buyers More Seriously

In the work we’ve done with brands, we’ve seen a massive spike in recruitment from young Gen Z buyers who are mid 20s and younger. Gen Z is the most entrepreneurial generation we’ve ever had in franchising and for them, franchise ownership is very attractive. Gen Z is enormous – there are almost 20 million MORE Gen Z members than there are Millennials and they were raised on stories of entrepreneurship. They are unafraid of failure and willing to work hard. Best of all, they are the most adept generation and self-directed learning, having never lived without access to YouTube.

Source: Statista

As we see buyers begin to come of age, there is a significant transfer of wealth from Gen X parents to their children and a massive resurgence in family business ownership.

Conventional wisdom is that parents who inquire for a franchise that the kids can run is a bad idea. So much so that most systems dismiss these types of buyers, thinking that the kids are slackers, unable to get a job, and nobody wants a slacker in their system.

The evolution of this group is that there are thousands of young buyers who want to build a franchise empire, have a passion for a specific franchise industry and have access to capital through their parents. Parents who are more than willing to invest in their dreams.

Unfortunately, we’re dismissing the vast majority of these buyers by using heavy handed financial screening up front.

The takeaway was simply that younger buyers have more potential than we thought, and they need more conversation around financing a deal before you kill them out – you won’t know what resources they have until you’ve spent time with them. These young buyers are the future and the next one you recruit could evolve into a massive multi-unit owner by the time they are really old. Like 35 or 40.

Sales processes are conversational, not linear

With franchise buyers coming from several generations and from a wide variety of buyer personas, we are still trying to force everyone through the same, rigid sales process. Perhaps the biggest killer of deals is just not taking the time to slow down and get to know your prospects. What do they want? What are they trying to accomplish?

Several attendees at the franchise sales roundtables talked about how flexibility in the sales process is now a necessity. All buyers need to end up at the same point with the right amount of education and with the same amount of documentation and that doesn’t mean they need to follow the exact path.

How they get there varies and smart recruiters are simply asking candidates up front “what does your buying process look like; what do you want to know and how do you like to learn?” Gaining permission by asking opens the door for you to help design a discovery path the prospect appreciates. This creates more momentum in the process for both parties and makes it more efficient.

The death of the webinar

We heard from multiple recruiters that traditional webinars are fading away, getting replaced with other conversation types or other media. A webinar was excellent in an era when everyone was on a desktop or laptop; they are very challenging if your prospects are using mobile phones to communicate with you.

Think about it – if you are talking to a recruiter at home or on a lunch break or over a weekend, your smart phone is the device you are most likely using. Attending a webinar on a phone is near impossible, resulting in a lot of no-shows.

Recruiters are replacing webinars with structured voice conversations, video chats, podcast recordings or conversational videos. In short, take the webinar info and break up the content into material you can share during or after calls.

We especially liked the idea of podcast libraries of 15- and 20-minute recorded conversations that cover important topics such as:

  • An interview with the CEO about the future of the brand
  • A conversation with the COO about what is driving sales increases
  • Franchisee stories about specific owners and what their daily life is like
  • Your trainer talking about what you learn and explaining the onboarding process
  • A podcast about the most commonly asked questions
  • What to expect from Discovery Day
  • A conversation with a lender about financing options

Making shorter conversations prospects can listen to on their commute is a great and universally popular way to educate them.

Your phone will stop working shortly

Think about the typical phone call – our entire approach as an industry towards how we communicate with prospects is based on salespeople hitting the phones. We measure sales activity using phones, spend a lot of time thinking about contact rates and expect our salespeople to be physically connected to a phone ALL DAY.

What would happen if you weren’t able to call your leads? What if nobody ever picked up a call and you couldn’t get to a real person, no matter how many calls you made?

Phone carriers are already blocking sales calls, labeling them as ‘telemarketers’ or ‘spam’ calls. Apple recently rolled out a new feature that sends any number not in your contacts or email automatically into your voicemail, so you won’t be bothered by salespeople calling you.

The day is fast approaching where we’ll need a viable way to reach out to leads and avoid the initial phone call. We’ll focus more on scheduling calls and chat / text / SMS push notifications to communicate with prospects.

If you work in just about any modern office, Slack is now a mainstay. In our office, we communicate via Slack channels and we don’t use email, phone calls or even texting. In some organizations, Facebook messenger, WhatsApp or other messaging systems have taken over.

Texting, thanks to companies like FranFunnel, is helping break this barrier down. For our sales clients, we auto text all leads, and it results in an average 28% contact rate before we make the first call. Auto texting is just the beginning. The future might involve Facebook messenger, push notifications, text-based lead nurturing campaigns and a variety of other non-phone call tactics. These technologies are evolving quickly – it is time to start thinking hard about what the future looks like!

What’s Next?

The decade ahead is promising. Although there is some uncertainty, we don’t have any looming bubbles about to burst and our economy looks strong. Younger buyers are entering franchise systems as owners and brands that can adapt and stay relevant will thrive.

What were your takeaways from the 2020 IFA Convention?

About Brand Journalists

Brand Journalists uses a specialized team of former newspaper writers and video journalists, matched with some of the best designers and SEO / PPC / SEM practitioners in the country, to produce high-performance recruitment websites and franchise lead generation campaigns that far exceed industry norms. We’ve grown over 180 franchise brands and helped development teams recruit over 10,000 new franchise owners since our inception in 2008. We’re based in Nashville, TN.

Download our capabilities deck here









We’re entering a new era in franchise recruitment and growing a franchise brand in the decade ahead is sure to be a challenge

By Thomas Scott, CEO, and Founder, Brand Journalists

As we wind down the 2010s, we stand on the threshold of a new and wildly different era of franchising. The 2019 Franchise Leadership and Development Conference kicked off its 21st year with record attendance and the message for franchise development professionals is mixed.

On one hand, the average age of franchise buyers is getting lower and historically high numbers of buyers are interested in franchising. A robust economy without any looming bubbles is propelling this along with a generational view that entrepreneurship is the career of choice, replacing a job as a career path for millions. Bank lending and a transfer of wealth from parents and older family members are increasing franchise development momentum for many brands.

On the other hand, the future economic growth is showing some signs of decline, the job market is as strong as it has been in a few decades and the sheer number of franchise opportunities has skyrocketed. Fears of an economic decline, helped by tariff negotiations, Brexit and a polarizing political climate have created an atmosphere of uncertainty that franchise systems are feeling.

Feedback from attendees at this year’s conference was that they are seeing much longer sales process times, lower conversion rates, reluctance to fill out applications and a much more hesitant path towards ownership from buyers.

So even though we should be recruiting record numbers of buyers – and the buyers are out there – we’re finding that as an industry, this new era of buyer uncertainty is making an already hard sale even harder.

The brands we work with are seeing some across the board, solid growth this year, much of which is at odds with the conventional wisdom presented at the conference.

Which perspective is right or more importantly, which perspective are you going to choose in the decade ahead?

Here are our important takeaways from this year’s conference:

The Costs of Recruitment are Increasing:

This year, the average advertising cost per sale grew from $8,984 to $10,500, the average cost of a lead grew from $126 last year to $213 this year and the average franchise development advertising budget grew from $189,000 a year or $15,750 a month to $221,000 or $18,416 a month for enough advertising to generate 24 deals. Franchise lead generation and buyer recruitment are not cheap, and it isn’t getting cheaper.

The lesson from this year: there are more buyers and the economy is favorable to franchising but that won’t guarantee sales results. Franchise lead generation and development marketing is fast becoming much more complex and targeted. The era of commodity lead generation where all buyers are equal will fade out with the preceding decade.

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Younger Buyers:

This year franchise update increased the font size on our name tags, presumably so the quickly aging franchise exec population can better read the tags. At the same time, the avg age of franchise buyers is dropping and we’re seeing younger buyers than ever. The gap is painfully obvious – buyers want and expect behavior from recruiters and brands when it comes to franchise purchases that we are simply not giving them. For buyer data we have access to from our client base, we’ve seen Millennial buyers (aged 25 to 37) grow from 18 to 32% of buyers. Generation X buyers made up 46%, Baby Boomers made up only 17% of buyers and shockingly, buyers 25 and under made up 5% of our buyers. That’s a first in our experience and it is important.

Younger buyers have radically different attitudes towards franchise ownership and entrepreneurship in general and their Generation X parents are both encouraging and funding franchise purchases. If you struggle or dismiss Millennial buyers, you won’t have a chance with even younger, YouTube generation buyers who expect to have total control over the process and have radically higher expectations for access to detailed information before they talk to you. The next decade is going to change the way we allocate our budgets, the style of websites we build and the skills and technology our recruiters need to be effective.

Your Recruitment Website is already outdated:

We’re just ending the decade you could aptly call the ‘era of self-directed research.’ The dedicated and separate franchise recruitment website became necessary in the past decade and it has evolved to a critical element today. Going forward, recruitment websites are evolving even more and expect your investment in how you tell prospects your brand story to increase.

This year, companies participating in the lead generation survey reported they spent more on recruitment websites and that it now totals 15% a year of the total budget, or about $30,000 a year. Next-generation websites – like the ones were designing and building for clients – are more substantial. They include more video production, have persona-focused funnels dedicated to specific buyer types and transform differently for Facebook and LinkedIn visitors than they do for Google or traditional users. Getting in front of buyers is hard and getting harder – a well thought out and high-performance recruitment website can make the difference in hitting your goals or having to rethink your plan. Expect the investment in website creation – which includes content, video and other types of storytelling – to become a larger and more regular part of your budget. Without it, you might not fare well in other channels like PR, trade shows and consumer traffic.

The days of being able to call leads are getting shorter:

Think about the phone call – our entire approach as an industry towards how we communicate with prospects is based on the phone. What would happen if you weren’t able to call your leads? How would you communicate with them and have conversations?

Apple, ATT&T and other phone carriers are already blocking sales calls, labeling them as ‘telemarketers’ or ‘spam’ calls. Apple recently rolled out a new feature that sends any number not in your contacts or email automatically into your voicemail, so you won’t be bothered by salespeople calling you. We’re hyper-focused on the phone call as the measurement on lead quality but what if that ceases to become a viable way to reach prospects in the decade ahead?

Texting, thanks to companies like FranFunnel, is helping break this barrier down. For our sales clients, we auto text all leads, and it results in an average 28% contact rate before we make the first call. Auto texting is just the beginning. The future might involve Facebook messenger, push notifications, text-based lead nurturing campaigns and a variety of other non-phone call tactics.

CRM Technology is outdated:

Ok, 2003 called and wants its CRM back. Seriously, I love working on franchise-industry CRM systems and our clients use both Emax and Franconnect. Unfortunately, what recruiters and sales managers need today is far beyond what these systems deliver. There is a gap between the way we need to communicate and interact with prospects and the way a prospect wants to communicate with us.

Switching screens on a laptop are not hard, try juggling those on a phone. For that matter, have you tried to fill out an application on a phone? Look at a spreadsheet on a phone? We are anchored down by our reliance on outdated CRM technology which was designed to work on desktops. Change #1 would be to move everything to an app so that a salesperson could do 100% of their work using just a smartphone. My coffee café franchises, Just Love Coffee, use TOAST as a POS system and as a multi-unit owner, I can run my entire operation from my phone. If something that complicated can be done through a phone, why can’t a simple sales pipeline and candidate management be done easily.

Talk at the conference centered on the shortcomings – not enough texting and lead nurturing functions, difficult reporting, and way-outdated user interfaces. If CRMs are simpler to use, salespeople will use them! Our industry is ripe for a disrupter to change the way we think about CRM systems.

The Sales Process is changing:

A big point several presenters made was simply that if you are still using a ridged sales process, you are probably costing your company deals. The takeaway this year was that there are as many different paths through a sales process as there are buyers and everyone has a unique buying process.

Applications moving back in the process and becoming much more streamlined. Applications cause trust issues and forcing them too early just costs deals. It is clear that forcing them too early also doesn’t improve the quality of buyers. It’s a lose-lose.

The best idea we heard: ask prospects in the first call simply how they want to research and buy a franchise; what is the process they have in mind and what important pieces of information do they want to learn? Most buyers can answer this question and will be able to tell you what they want. Simply give them what they want, and you will be far ahead of most recruiters.

Be flexible and try to help every prospect gather the information they need to make a good decision. Sticking to an overly rigid process just frustrates buyers and they go away.

A culture of growth is needed:

If the 2010s were the engagement age, we’re going to name the 2020s the transparency age. New buyers in the upcoming decade will have much higher expectations for transparency at all levels. The most important area where they want more transparency: access to actual franchisees.

They want to verify and validate that these owners are both profitable and happy, with happy being slightly more important for younger buyers than positive economics. If you have unhappy franchisees – unhappy because you are running a strict compliance culture and you haven’t involved franchisees in the development of your systems or given them an equal seat in the decisions that affect them – you won’t grow as fast as a company that understands this.

Tropical smoothie doubled from 400 to 800 units in the past few years by giving its franchise owners a seat at the table and worked collaboratively with them to develop systems. It is a very franchisee-centric culture with development committees both coming up with systems, weighing on decisions and giving key feedback, including killing poorly thought out ideas. This is the new normal – franchise systems are not democracies, but the franchise owners need to feel like it is. Nothing frustrates franchise owners more than ivory tower, command and control behavior on the part of a franchisor. Build a culture of growth – foster a collaborative culture and invest in training them to serve franchisees. Buyers can smell the difference when they do research, and this is going to be more important going forward!

Facebook advertising is essential today:

Facebook matters. Are you spending money on Facebook ads? If you are not, you should be. The focus this year was on how to get a better result while spending less. For our buyers in 2019, 21% came from Facebook, up from 4% last year. Google AdWords, long hailed as both the highest quality and most expensive lead source.

Here’s the deal: the average target franchise buyer spends 2.2 HOURS a day on social media, mostly on Facebook and its related platform, Instagram. 2.2 Hours!!! The same target buyer spends a paltry 23 minutes on the ‘internet’ – and only a small portion of that on a search engine. The takeaway is simply that you need to advertise where your buyers are and in today’s market, they are on Facebook.

If you didn’t get results, you are not doing something right. Buyers are on Facebook and you can generate deals from Facebook if you stick with it. Keys to success for adverting on Facebook got as specific as you can with targeting; this is where most companies miss the mark. Change your ad creative out often – the cost of creative production and design should cost more than your actual ad spend because Facebook ads get fatigued quickly. Train your salespeople to work these leads and use autoresponder text or messenger systems to communicate with these people. Just because they don’t want to jump on a phone call does not mean they are not buyers.

Segmentation and Persona Marketing: 

the days of monolithic buyers are fading away – the next generation of franchise lead generation is much more targeted and contextual to the type of buyer you want to recruit.

Do you know who your best buyers are? How do they each view your value proposition? Do you have content and a website tailored to the conversation they want to have with you? The next level is going to be focused on targeting more specific buyers and thinking through how they view your brand, what the emotional triggers are and what cost-effective ways can you get your relevant messages in front of them.

This type of marketing requires a higher investment in website content and more sophistication in marketing ability but offers to help you recruit better performing owners in an era when your competition is struggling.

The decade ahead is promising – although there is some uncertainty, we don’t have any looming bubbles about to burst and our economy looks strong. Younger buyers are entering franchise systems as owners and brands that can adapt and stay relevant will thrive.

What were your takeaways from the 2019 FLDC?

About Brand Journalists

Brand Journalists uses a specialized team of former newspaper writers and video journalists, matched with some of the best designers and SEO / PPC / SEM practitioners in the country, to produce high-performance recruitment websites and franchise lead generation campaigns that far exceed industry norms. We’ve grown over 175 franchise brands and helped development teams recruit over 10,000 new franchise owners since our inception in 2008. We’re based in Nashville, TN.




Why is Facebook marketing so difficult for franchise salespeople to get good results with?

We are seeing brands we work with close franchise deals from Facebook on an almost daily basis. For franchise development, this is where the new action is at.

Five years ago, Google was the king of franchise research. If you wanted to research or learn about franchises, you went to Google.

Today, Google is still important but it has to share time with a number of other content platforms. Google isn’t the only – or even the main – source for you to create brand and build visibility with potential franchisees. Google has gotten more and more expensive – the cost to reach 1,000 people is now $3. Facebook (and Instagram), by comparison, is only .25 to reach the same 1,000 people. Linkedin is .75 per 1,000 consumers.

When it comes to lead costs, the average good quality Google Adwords leads run $100-300 a piece. A facebook lead, which might not be the same quality, costs $5-20 per lead.

“Facebook could double or triple its rates and it would still be the best bargain for digital marketing in town,” Jack Monson, CDO of Social Joey.

Here’s the deal:

To combat and deal with the onslaught of digital content coming at consumers today, the typical person is now compartmentalizing digital information. People are not at a desk, working on a laptop, doing research.

Today, consumers have shifted – the typical behaviour is different than it was five years ago. Today, people spend blocks of time – mostly on their phone – sifting through the content channels they subscribe to and they do it in sequence. They might look at Linkedin, then Facebook, then Instagram, then email, then messenger, then a news feed and on and on. They might do this 3-4 times a day in blocks.

The key is – if you can create visibility during this channel surfing – you have an opportunity to broadcast a relevant piece of content to someone and hit them 3-4 times on multiple platforms. This is the key to recruitment in the years ahead.

Frustrated with Facebook? Been telling yourself stories about why Facebook doesn’t work for Franchise Sales? Keep telling yourself that – your competition will steal your prospects from you!

Curious about generating franchise leads for your brand? Start a conversation with us!

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What This is About – Read This:

According to Forbes magazine, more women are buying franchises than ever before and at the same time, women are making huge inroads into franchise development and company leadership.

Many of our role models in the franchise space are women and we see increasing numbers of younger women turning to entrepreneurship and franchising in particular. To discuss this topic, we invited two recruiters we admire to join us: Jennifer Benjamin, VP of Development for Lennys Grill and Subs and Kim Robinson, VP of Development for Aamco Transmissions and Hybrid Repair. We’ve worked with both of these top performers at several brands and have a lot of respect for the way they approach their work.

David Sparks, our CDO, is fond of saying ‘The best way to sell is simply not to sell’ to explain why so many, mostly male, salespeople oversell and push too hard. As franchise buyers have changed dramatically, getting younger and bringing with them new expectations of the sales process and the salespeople, we believe these two guests have some valuable insight into what drives franchise sales results.

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What This is About:

If you manage franchise salespeople who handle organic, non-broker leads, how often do you hear passionate feedback from them that leads from a particular source are poor quality? That leads from a particular source have no money, are not qualified, are just kicking tires, ect?

Is this feedback REALLY accurate or is it a narrative the salesperson builds to rationalize their behavior and results in the process. Tracking and managing lead sources, costs and sales progression is critical. What isn’t critical is sharing this information with salespeople real-time.

“Hiding the Lead Source stops salespeople from introducing a negative narrative into sales conversations and forces them to work every lead the same way, increasing sales performance” – Thomas Scott, CEO Brand Journalists

Want to jumpstart lagging sales? Consider hiding the lead source from the notification the salesperson gets. This does two things:

1. Forces the salesperson to respond to each lead in a uniform way – there is no way for them to cherry pick leads and they give the same level of attention to each person, regardless of lead source.

2. It keeps the salesperson from sabotaging their own results by dragging in mental baggage about the lead source into the conversation. Baggage that keeps them from responding quickly, shortens the conversations, limits followup and positions them poorly to get maximum results in the sales process.

Listen in as David Sparks, CDO of Brand Journalists and I talk about how to use this controversial sales management tool. David hides his own lead sources and as a result, produces 2-3 times the sales results from the same number of leads other recruiters use.


What This Is:

Missed the 2019 Canadian Franchise Association Conference?

You missed one of the best Franchise Development panels I’ve heard in a long time. We recorded the discussion in front of a packed room so you can listen in. Canada has 1/10th the population of the US but has 25% as many franchise systems. In fact, the 1250 franchise systems in Canada now make up the 12th largest industry in Canada and that industry is growing at a faster pace than the already face paced US franchise industry.

Franchise development isn’t that different in Canada
Here’s the topic and speakers on this panel:

Chairman’s Choice: Tips, Hacks, Advice, Strategies and Lessons Learned to Fuel Your Franchise Development
Panel Moderated by:
John DeHart, Nurse Next Door and LIVE WELL Exercise Clinic, Chairman of the CFA

Panelists are:
Mike Skitzki, Fran Worth
Thomas Scott, Brand Journalists
Gary Prenevost, Frannet
David Sparks, Brand Journalists

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The lack of a franchise resale program can do some real damage to your franchise development efforts! Not all franchise owners stay franchise owners forever and having a well-thought-out resale program is AS important as recruiting new buyers. Without one, you might close more units than you open and for no particularly good reason. This podcast shares our best practices when it comes to creating a resale program.


READ THIS: Transcript

Welcome to what the FRANCHISE, a regular podcast on franchise development, franchise sales techniques and strategies for growing your franchise system. And today, I have a special guest, Liz Berman, from BizBuySell. And one of the things we’re going to talk about today is something I speak often to on clients is, the importance of having an actual resale program for franchise development.

It’s shocking to me when I talk to clients, even well-established brands way down to emerging brands and they haven’t really given a thought to “how do I exit franchise owners from my system when it’s time for them to exit”? Because not every franchise owner signs a franchise agreement and last for 20 years. The average term, last time I saw some data, was around seven years was the average term. Sometimes that’s shorter, there are emerging brands where somebody might get in on the ground floor, have a really fun two or three of running the business, and then exit and go do something else. Those kind of serial entrepreneurs.

We have a ton of baby boomers today, it’s baby boomers who are aging out of the franchise market. If you’re a baby boomer, you were raised to go to college, to work for a Fortune 500 company, to retire on a pension as early as you could and play golf or live on the beach or go fishing or whatever your life desires. And as that demographic group, which historically had been the main group in franchising for the last 30 years, gets in their late 50s and late 60s and early 70s, we see this incidence of them wanting to walk away from an otherwise completely successful profitable business and not really wanting to mess around with selling it.

So, without very little notice, they just shut down. I’ve seen that with really well established brands. It’s shocking to franchisers, they don’t see it coming but, there’s really no excuse for not having a resale program. So, I invited Liz on who’s here in Nashville with us today in the office, which is a real special treat because, we work real closely with BizBuySell when it comes to resale marketing. One of the things we do with all of our clients is really encourage them to set up a formal resale program. So before I unpack what that means, I wanted to let Liz talk about, share a little bit about what BizBuySell is and why that’s such an important component of any resale program. So Liz, that’s for joining us today.

Yeah. It’s my pleasure. Happy to be here.

Why is BizBuySell so important to somebody who’s looking to buy an existing business and who is the visitor to BizBuySell?

Absolutely. So, BizBuySell is the larges business for sale marketplace. We work with a network that includes BizBuySell and BizQuest and we have partnerships with a hundred plus really familiar newsgroups. Wall Street Journal, all of that kind of side of things. So that when a business comes up on BizBuySell, it’s not just in one place.

It’s important because small business ownership is a definite cornerstone of the American dream in a lot of ways. We definitely want to provide a place, a marketplace, that allows individuals coming into to buy something new, buy books of business, things of that nature to grow their own paths of income, work, all of that kind of stuff to reach that dream. That is definitely what we do.

There’s over 25 million small businesses in the United States. There’s a little over a million of those are franchised units. We’re growing. We’re 1/25th of the population of the … in the franchise industry, we think of BizBuySell as a tool to list businesses for sale. So that’s it’s primary job, it does a lot of franchise lead generation and emails and we use them for a variety of digital marketing strategies that fit in with our organic lead generation strategies.

One of the things I think is really important for you to understand when you’re starting to design your own resale program is, BizBuySell is the dominant platform and they really dominate organic search around business for sale searches. So anybody in any locale down to the very small locales is looking for a business to buy, an existing business to buy, is going to come across BizBuySell. It’s just the gorilla in the room and it’s luckily not terribly expensive to advertise on.

I think one of our tips for brands, if you’re a legacy brand, is you should always buy bundles of resale ads instead of spending $300 or $400 for a single ad that lasts for 90 days, the magic number for us is 26. We try to buy packages of 26 because the pricing is much more attractive. And then you can use them over a long period of time. You don’t have to use them all at once.


So, I don’t know if you want to talk about pricing for … or talk about what a resale ad is.

So, BizBuySell, we have between 50 and 55,000 active listings at any time so, we as you said, Thomas, really do dominate in terms of market share and all of the organic searching. When you do a search for “business for sale”, it’s us. You always want to be taking advantage of that.

With the BizBuySell listings, we do networks listing between BizBuySell and BizQuest and what happens is you come in, you purchase a package of listings, 26 is a magic number, 50 is a magic number depending on your inventory. And what it is, is you get a credit set for 90 days, or 3 month, showcase level listings which are a higher level listings with us. Essentially, what happens is you get price breaks on different tiers. So the 26 is a magic number because, it’s like 1 to 25 and then 26 to 49. 50 is a magic number. We do 100+ as well.

For bigger brands. Yeah.

For bigger brands, of course.

And we’ve had a lot of luck, we were just on the phone today with Merle Norman talking, they had 1200 unit legacy brand with three and four generation owners so, there’s always lots of transition in and out. We’ve done really with AAMCO … you know, I’ve sold my, in addition to being a franchise consultant and a supplier, I’m a serial junkie when it comes to franchising.

Part of being a good lead generator is you psych yourself up enough where you want to buy the brand that you’re working for. That’s true of any sales person. So I actually end up buying franchises. I’ve got some coffee shops from Just Love Coffee here in Nashville that I’m a real fan of. But, to open those, I ended up selling a business we had prior.

My wife and I ran Woops! franchise which is a Macaron business that’s in malls. It was a really fun business. We had it for three years. When we got a little over, busier than my wife was comfortable with running full on coffee shops and cafés on the side, we decided to sell that. We put a business listing up and I got four leads and two of the four leads were buyers and I sold it in 24 hours.

Yep. Those conversion numbers though.

Yeah. It’s really really good. It’s nice. That doesn’t happen with everybody but, we’ve used BizBuySell as a primary lead generation tool for a lot of brands over the years. I highly recommend it.

Let’s talk a little bit about what a resale program looks like. So heres, if you don’t have one already, here are the components. I think it starts with education. One of the things that I think people really short change and don’t think about is, one of the things you can do with franchisees is simply educate them on what an exit looks like. I’m a big fan, and having been a franchise owner myself before, of always keeping a report card on your franchisees. Break them into three groups. A, B, and C. A’s are the rock stars. The top performers. The people that subsidize your support team and pay the most in royalties and also, consequently, don’t need as much support. Your conversations with those groups are, “How can I help you?”

Yeah. Different.

“What can I do? What can I do to help you?” “We love you. What can we do?” Those are the people that you die to have in relationships. If you’re doing a good job of developing, you should have a bunch of those.

The B group are people that are either new or aren’t quite at the top performer level but, are working towards it. People that you feel like through ongoing support and training in systems and marketing, you can get those people up to speed.

And the third group would be the C group where people that really … you should design an exit. And we talk what that means when I say “design and exit”.

Franchising is almost like a primal business model. It’s full of emotions and psychology and influence and it’s not the same thing as running a business with employees. One of the things that makes for graceful relationships in franchising is simply making sure you always give franchisees choices.

And so, when you explain to someone, let’s say you have baby boomers, they’re not ready to sell today but, I can guarantee you if you have 65 year old baby boomers in your system, there’s a day soon where they’re going to want to sell and you’re not going to be prepared unless you have that conversation with them earlier.

Educating people on what the exit strategy looks like and giving them choices so that they can design their own exit, you could say, “Look, you’re doing great now. If you ever do want to sell or expand, it could go either direction, you could get out or you can dig in and retrench, here’s what that looks like.” And giving people two or three options, which is a trick that I learned from Greg Nathan in Australia who I really recommend, it simply gives people control of their situation.

Most people are so close to the daily running of a franchise and the stress and the highs and the lows and the fun and you walk in and your staff quits, all kind of really … they’re not really thinking long term like you are. You’re in a different perspective than your franchisee is.

So when you can say, “Look, there’s three ways to do this. You can prep your business for sale, and here’s what that looks like and get a high price. Here’s what the strategy looks like when you get ready to sell, you should start six months or a year before and start working towards that goal and here’s a whole list of things you can do to prep for that. It involves things like getting your books in order. Which is the single most important component of selling a business and here’s what a healthy set of books looks like. Here’s what a poor set of books like.”

If you’re like a lot of franchisees, even with strict FTD language and agreement language, most franchisees use QuickBooks to prepare for taxes. They’re not using it real time they way you would like them to unless you’ve got some automated POS system where you can track some of the activity in the business. But understanding and teaching, and we do this through PowerPoints usually when we’re working with franchisees, here’s what drives the value of a business.

I was able to sell my Woops! Franchise, my Macaron business, because I had three locations, they were profitable, I had a set of books. I could literally say in my ad, I think the title of the ad was “Successful multi-unit Macaron franchise in prime locations of Nashville” and I have a P & L and I was able to kind of move it along and I always recommend owners do 50% owner financing on a deal because that sweetens the pot quite a bit.

Generally here’s what drives the multiple. The general rule of thumb for franchises is EBITDA or the owner benefit, which are not always the same number. Your P & L bottom line might be your actual EBITDA but your owner benefit is a pull out what the owner pulls out of the business. The cars they run through it. The educational benefit. Any bills the business pays plus what they themselves and/or a manager might be this kind of chunk of owner benefit. That’s what you have to illustrate to a potential buyer.

So teaching them to understand what owner benefit is, how to get to that number and how to measure it on a monthly basis so that … because that’s what drives the growth. Generally a business that’s got sales increases, even marginal sales increases, would be 2 to 2 1/2 times owner benefit. A business that’s trending downward would be 1 to 1 1/2 times owner benefit. Or sometimes less than one if it’s fell off a cliff and if you have no income, meaning your expenses are more than your sales, then you’re really looking at an asset sale. And that’s a pennies on the dollar equation.

If you have that conversation a year before somebody wants to sell and you lay out the fixes, the here’s what you can do to really move this needle, then you can give somebody an idea of what to work for and how to improve books. I’ve had a lot of experiences where franchisees say, “I don’t think I’m really making money.” And they don’t really know if they’re making money.

We actually do the dirty work of fixing the books and educating on … it turns out they’re making a lot more money than they want. And also, the journey to fix books on a business and get it in healthy bookkeeping condition actually gets people so enamored. It’s like staging your house to sell. You stage your house, you decorate it, make it look beautiful. And then you go, “Wow. I love this house. I don’t want to move.”

It’s new again.

So they start … it’s a funny thing. But all of that is franchise support psychology that needs to happen early on. That’s the first part is educational. That can be a, “Here are the levers you need to pull to design your exit.” Design a deck and explain valuation. Explain the importance of books. Explain what drives owner benefit.

Explain the strategies to generate leads for your business. Having a formal lead generation program of some … here’s what a … because, buyers don’t fall out of the sky. It’s not like it’s realistic for a franchisee to expect that $200,000 of advertising you’re spending to grow the franchise system as a development executive, that really shouldn’t go to a resale. You want to go to adding new units. Luckily, the avenues and place people to buy existing businesses are different than where they look to buy new franchises.

It’s easy to say, “Look, here’s the price for a BizBuySell resale listing. Here’s what an email blast costs. Here’s a little bit of Facebook marketing geofenced in your area.” Maybe it’s at the $1,000 of advertising over 90 days. It’s not a huge thing but, that’s what it costs to really attract a good buyer. I probably had 500 bucks in advertising for my Macaron franchise and was able to get a buyer in 24 hours. I’m in the business of doing that so that’s not really fair. That’s not a normal event. But I see people sell businesses all the time.

So laying out a package, and Liz Berman who’s a really good resource for that because that again, there are companies that just use BizBuySell for resale programs. I generally recommend having a mix of BizBuySell products for resale listing. So, listing your business.

Having a landing page on your website that’s not part of the navigation. So, one of the things you don’t want to do is, on your franchise or premium website, have a big button that says, “available franchises for sale” because it sends a really bad message. It’s like if you go into a neighborhood and every house on the street is for sale, and none of them are selling, it sends a real negative message. Plus, if people come to look at your franchise and they see there’s resale opportunities, it’s like a magnet. You can’t ever get them back to learn about the franchise opportunity.

I do think having a hidden landing page that you can share the link with people is really valuable. Then you can explain if we’re talking about Merle Norman or AMMCO, trying to restart a legacy market where they’ve just aged out or the leases are up. Or there was a shooting in a mall and the mall’s dead and it’s time to move the Merle Norman to another location, whatever the issues are, there are ways to find buyers for those.

Definitely a resale program would have some advertising components so BizBuySell. We’re big fans of doing dedicated Facebook marketing for leads in the geographic area using a variety of visual content that links to the landing page on your website. So that you can generate using a lead form on Facebook.

Also sending dead lead emails to your database. Pull all the leads you’ve generated forever. From North Carolina, if you’re in Charlotte, and sending a quick and dirty, “Hey. We have opportunities for resales in this market. If you’ve ever looked at us and you’re still in the market and you haven’t bought something check out this listing.” So, they’re getting to that landing page which isn’t linked to your navigation just through an email. It’s an easy way to leverage your support.

Generally, Facebook, email and BizBuySell are what compose … we usually can sell a business with one of those three pieces. That’s a pretty diverse thing. Some people just do BizBuySell. So I would have that as a way. And make sure that the educational component is straight up.

Now, the one piece of this that I didn’t talk about and I think it’s really important and people cut corners on is your operations support team who don’t typically think like franchise sales people or recruiters, really spend time to train them to have conversations about what the exit looks like way in advance. So, even as early as initial training saying, “Here’s what the life cycle of a franchisee in our system looks like.” We’re all having our honeymoon and everybody’s excited, we can’t wait to go make smoothies or sell juice or flip burger or clean carpet or whatever it is we’re going to do in this franchise enterprise but, we really should talk about what a typical lifecycle of a franchisee looks like in our system. The average tenure is 19 years or 7 years or 12 years.

Some people are in their third generation of ownership and here are some people that we can spotlight. Some people are serial entrepreneurs and have a business for three years and flip it and move on. I’m slightly guilty of that myself. That’s okay if they’re good operators and they can turn it into a profitable business.

So, when you get to this point in business, and The E-Myth is a good book to read that kind of helps people understand the psychology of the life cycle. Greg Nathan’s books on franchise recruitment are also ones I recommend for everybody. But just set the expectation that, look, life is a journey and every journey has an ending and that’s normal. There’s normalcy to that. So, if you get to where you’re not having fun and you don’t enjoy this business, we don’t want you to hang around and be a turd in the punch bowl. That’s what my wife likes to say. We want people to enjoy this business and have happiness.

So when you get to that point, here’s what those conversations look like. Here’s how to plan for it. Here are some … you know, you might have relationships with business brokers, a lot of brands also have resale brokers that they engage.

Then the last piece of a business resale program is deciding a, whether you want to use business resale brokers or whether or not you want to pay a commission to the internal sales person. I don’t think it’s right to expect your internal sale people to work resales without a commission. We often explain up front, “Hey. If you pay for the advertising, there’s a $7500 or $10,000 commission due or 10% of whatever you collect up front due on the business.” And that’s the way that works. You can work it yourself, you can hire a business broker or you can hire us.

It goes back to giving people choices. You’ll find that people will design their own exit and they’ll have a real clear thing. Instead of it being a contentious litigation piece, “Hey. I think I’m ready to exit the system.” “Oh great. Let’s start this process then.” If you have a really well-established business resale program life is a lot sweeter, a lot less contentious and a lot less stressful.

Again, Liz, if you want to share your email and phone contact information with us for users.


In case.

Of course. Yeah, so, Thomas is 1000% correct, the education is so important and when you have a program in place, it’s really very easy to just reproduce it. You’ve got North Carolina, something exiting there, you do this thing, it works really well. It can work just as well for Georgia. It can work just as well for Florida. It can work just as well for everywhere. We can absolutely do that.

That kind of advertising number was really pretty accurate as well. In general, bigger states are going to cost a little different than smaller states but, there’s usually a lot of different return on investment for that.

A resale listing is the same no matter where it is-

Yeah. A resale listing is the same cost. You know-

Email marketing.

You get deeper discounts, yeah.

Like targeted email marketing if you need to go to that level. It costs more.

Yeah. But the programming of it is very, very similar and reproducible. In the tiered pricing on the listings can get you 59% off of the retail cost of a per listing. There’s good discounts available on there for some of the bigger buys. The smaller buys have at least 28% off so, you’re good there too.

The targeted state pieces are just dependent on the states themselves. Idaho’s going to cost a lot less than Texas.

Or California or here.

California’s going to cost a lot different than here in Tennessee.

Everywhere else.

It depends but, there’s a tried and true way of doing it and I work with individual brands, with brand journalists here, different brokers and et cetera as well.

You can absolutely connect with me directly. My email is E, as in Elizabeth, Berman, B as in boy, E-R-M-A-N at BizBuySell, and that’s B-I-Z-B-U-Y-S-E-L-L, .com. Email is generally the easiest way to get to me but, I can also be reached at 844-481-1795.

All right. Thanks Liz. And last stat of the podcast before we wind up is just when I have a deck, a slide in my deck when I’m talking to new clients that I always explain is where do deals come from. That’s something everybody wants to know. 5% of the deals we do every year are resales. If you look at that if you did 25 deals, were 5% of them resales last year in your system? You didn’t do any resales? I guarantee you you’re missing opportunity because, rather than have a unit close and have to post it as a loss, helping somebody design and exit and recruiting a better person or, sometimes it’s an upgrade.

It’s not always an upgrade but sometimes, it is an upgrade. There are people who love to buy existing businesses and can ramp performances up sometimes as much as 40%. And that’s all they look for. They don’t really want to do the hard work for building a new unit out. They want to get one that’s not run as well as they think it could be and then they’re good operators and they come in and turbo charge the business.

The last piece, so 5% of deals, so if you’re doing 5% resales, you’re good. If you’re doing more than that, you might have some issues in your system you need to looks at. If you’re not doing 5%, you’re probably missing some opportunities to increase. Because, you have to stay ahead of that with all the baby boomers exiting, you’re going to end up having some sales decreases and unit counts because you just were slacking off when it came to thinking about your resale program as much.

The last tip, one other tip, the longer we talk I got more tips. Really think about combo deals. When you market resales, one of the things that a lot of systems, we did this with Fantastic Sams over the last few years with some really astounding success, is bundle an attractive resale at an attractive price point, with good owner financing.

Which is something you can do if you have a business that’s not as profitable, being willing to have owner financing and carry a note, interest-free note even, makes it so easy to find a buyer. People jump at that. There are so many young buyers that just can’t get a break from a bank and owner financing is super attractive but, packaging it as a combo where you buy this one, you get it straightened out, within a year you open your second one and you get a multi-unit deal with three units. But it starts with the acquisition of a resale bundled together with kind of improving a trade area. There are people that buy into that, that would never ever buy a franchise from you straight up but, the combo deal is the way to start that conversation and increase your unit count.

Want help creating your own resale program? Reach out and start a conversation with us!

Content marketing is not just writing, it is a lot more complex than ever before and it is changing rapidly

Creating a real, contextual connection with your franchise buyer prospect requires more content and different styles of content than ever before. Listen in as we discuss the challenges and talk about strategies for winning at franchise development today:


Read the Transcript:

Welcome to what the FRANCHISE, the regular podcast about franchise development, tips and best practices and strategies for growth. My name is Thomas Scott. I’m the CEO and founder of Brand Journalists, and today I’ve got a really interesting topic that I’m very passionate about.

I want to talk about the changing nature of content marketing for franchise development, and what I really, specifically mean is buyer acquisition. How do you reach out with your brand and connect meaningfully with relevant content that’s contextual and creative and interesting with the people that are most likely to buy your franchise?

Content marketing’s not new

The name of our brand, Brand Journalists, we started content marketing for franchise development more than a decade ago, and I’ve been doing it with a lot of really great success for lots and lots of clients. But it has really evolved, and that was one of my big takeaways from this year’s IFA Conference, was that the scope of content that you need to produce to really engage the people who have your brand in their wheelhouse already, the people that are most likely to be good buyers, to have the passions and skills and where with all to do well in your franchise has really changed.

What I mean is, when we started content marketing it was an offshoot of social media where you were really blogging and writing articles. Content really meant words on webpages, for the most part, longer webpages, article format content based on Google’s original Panda update in 2010 which basically said, “People want when they want and they go to a search engine to ask questions.” What they’re asking of the search engine is for a detailed answer. And the answer most often preferred by people is simply an article that’s in the format of a journalism article like something you would read in a magazine or a newspaper, so 1500 word article that explains in detail the answer to whatever the search query is. That’s what most people want when they’re doing research on the internet.

So that gave birth to this idea of content marketing using brand storytelling and it makes a lot of sense. Right? The story as we understand it is the essence of human communication, and the story always stands out. The people we use, stories as humans to make sense of the world around us, to relate to one another and to make decisions in our lives. And everything that we do is boiled down to a story.

When you’re looking on Yelp for a restaurant review to go have dinner with your spouse or some friends, what you’re reading were in reviews and pictures or stories that people have told about their experience at a restaurant. So if you buy into this idea, the power of a well-told story is that you don’t realize you’re being sold to because it’s interesting, and then if you understand storytelling and sales and how they go together, meaning simply that sales is a really a series of conversations that take a story format.

A good franchise prospect wants you to tell them an enthusiastic and positive reinforcing story. So the story is the essence of content marketing. From it’s beginning content marketing was writing, was writing a lot, hiring journalists and former newspaper people to write articles, to blog, to write press releases, to write long format websites that could stop somebody and keep them engaged for 45 minutes.

So they were so excited about the life they could see themselves living as a franchise owner in your system that you would beat out your competition, and that’s been highly effective … It remains a very successful strategy for franchise lead generation and buyer acquisition and development marketing within a franchise system.

But here’s what’s changed. Today we would look at content … If I had to explain it to a client, I would say, “Look, content really is broken into three distinct buckets.” So the traditional form of content marketing which hasn’t decreased in volume, so we still have to produce the same amount of content in written form, on websites and press releases and in blogs and articles because people are still going to the search engine. And they still have an appetite for information. They still are able to be influenced by press releases and things they find on the internet. It’s still written form, so a third of the content that you have to produce now is traditional written content, written in a journalistic format. Not written in a series of bullet points, and not necessarily short.

The goal of content marketing is not to create content you can consume in 30 seconds or less, it’s really to get somebody to slow down and think thoughtfully about what this choice is that they want to make as a franchise owner.

So the next third big chunk of content which has evolved over the last five years is primarily video and increasingly audio. And I think audio, this is where conversing in this format, in the podcast format now which is audio based, is the most underutilized form of franchise development marketing. We just don’t understand the power of audio, and one of the reasons that podcasting and audio format marketing, which would translate into podcasts, also things like XM Radio and remnant marketing on local radio stations. Audio is very powerful. It’s very easy to communicate with. It’s very easy to share.

We do a ton of podcasts for clients where we interview franchisees and create really slick interfaces tied into the CRM so that somebody can be on the website or have already opted in on the website. Then when you’re talking to the salesperson you say, “I’m going to send you a set of links to podcasts with franchisee interviews, and you can listen to them on your way home on your commute.”

So a third of the content today is video and by video I mean not the type of video where you bring a video photographer to your conference and you line all your franchisees up against the wall in logo shirts with a logo background and you make them say nice things about you. That’s very aggressive, kind of forced, artificial video.

What I really mean is a video that is cinematic and documentary style and storytelling in its nature with lots of movement. If you’re trying to communicate with younger buyers and you look on YouTube and see the movie making skills that even the average YouTuber has today, your video has to emulate aesthetically some of that both in LinkedIn format and scale and storytelling. Things like music and stop action and motion within the video itself, it’s people’s expectations for quality of video has changed. It’s not necessarily slick, high-end production value, but cinematic and storytelling that is common to what people use.

So a third of the content you produce is written, blogs, press releases, website content, articles on LinkedIn, all of those things. The next third is a mix of documentary and longer form video and testimonial video and podcasts, audio of various natures whether that’s podcasting in a traditional sense or is it … And then the third, that’s an industry we don’t do well at all. Like most franchise systems haven’t even gotten the first two covered, and they don’t even understand this third bucket.

But it’s really clear to us in our work that this is the next frontier of lead generation is what I would call visual content marketing. And if you spend any time on Facebook and the franchise industry, they’ll run … A majority of people do spend time on Facebook or LinkedIn … You know that what stops people is not written content. It’s not necessarily video content. It’s captivating images and graphics and infographics.

So a lot of the next third of content is how do you tell your brand’s story in a visual story based format that takes the form of pictures, infographics, carousel slide images, videos with text overlay, videos that you can watch without listening to the sound, but hear an interview? Now how do you communicate all of this kind of visual content? So it might be something as simple as a pullout quote. You might have a quote from your founder that you really think is powerful, that you create an infographic on, and that’s what drives a LinkedIn post for one of the weeks you’re doing content marketing that might be a picture of a franchisee doing something fun.

I have three daughters in college and they’re like a lot of kids in that Generation C bucket, very entrepreneurial and very communicative. They will spend of time on their phones. And if I look at what they’re social media feeds look like, if I look at what their Snapchat looks like, if I look at what they’re Instagram look like, more importantly, what are the Instagram accounts that they gravitate towards, there’s a certain style and aesthetic and method of marketing in that type of imagery that’s very common and uniform for that generation. That is when I look at the typical visual marketing for a franchise system, we use stock pictures. We’re just pretty lame to put it bluntly. We do a really awful job of content marketing to start with, and we get into the really relevant stuff that’s catchy. So if you know what Boomerang is, is an app, or Memento is another really good app, they can use our Smartphone.

We’re sending young photographers out on our team, Generation C of millennial photographers on field visits with us when we go to clients, and we’re producing a lot of content just using a Smartphone for that matter which is an unheard of thing. And we’re doing Boomerang loop videos and Memento time lapse images and live image gifts, you might not even know what that is. A live image gift is my little Smartphones today make a series of pictures so you can see the moment around the time when you took the picture. It’s a really short slice, like a second or less. But you can actually create a gift that some movement in it.

So maybe you’re walking up to the front of your store, and the outside store instead of being a static image, has some animation and comes to life in text overlay and things like [inaudible 00:10:20]. But you can make a brand pop in a way that is really full of life. It doesn’t have to be a fun food brand. It can be something as mundane as a carpet cleaning franchise or a commercial cleaning franchise or even an IT business. There’s all types of ways to think about content today.

And the content takes the form, all three of these buckets, go in several places. Obviously your recruiting website is the home base for your brand story. So if you buy into content marketing you also have to buy into, at the same time, that you need to have a home base where you’re living, breathing brand story lives, and that’s typically your recruiting website. And on the website you have a core content, things like a research funnel with all the kind of traditional content that somebody needs to wrap their mind around your business, understand the culture and value proposition, build a proforma, and really visualize themselves as a franchisee. Because that’s what you need to get somebody educated and engaged and teed up for a conversation with a recruiter.

But you also need to have blog content on your website, some way to publish articles whether that’s landing pages, anchor pages, traditional blog articles, just ongoing content. Google expects you to publish new content on a regular basis. That could be something as simple as a series of press releases. It could be the kind of stuff, the content marketing we do for clients where we’re producing written content. It could be pages driven to dominate on SEO searches, but whatever it is, it’s on your website.

Beyond your website you’ll have forms like LinkedIn, Instagram and Facebook are really critical. It’s not today as simple as a LinkedIn, putting a post in your newsfeed. Maybe you have a separate editorial calendar where you’re posting articles on the LinkedIn blog platform itself which is very powerful. Like when I can get a recruiter that works with us to post content we create for them on their personal LinkedIn, it’s shocking how much visibility that person gets from that exposure. And if you do it on a regular basis, people begin to become much more aware of your brand, and you built brand at a very inexpensive rate. So using the blog function on LinkedIn to post an actual article on LinkedIn’s blog and platform which is something very few people do, posting stuff in your newsfeed is very important.

I would tend to link articles and produce some of the visual content. Perhaps you have, and it’s the nature of the newsfeed on LinkedIn, an article that has an entry to stack. I could put an infographic up that says, “Look I’m podcasting in audio format. Content marketing has increased 200% in the last two years, and here’s why.” And have an infographic in the post and then link to a piece of information that backs up the claim. That’s an interesting thing to read.

So if you’re thinking about your concept, if you’re in a frozen dessert brand and there’s been a trend that affects your brand, or if you’re a specialty coffee shop, or you want to talk about the number of square feet that an office cleaning business has potential to do, there’s a lot of ways to use numbers and stats to create something interesting and visual that will stop people and get them to pay attention to you.

Same with podcasts. On Facebook and LinkedIn and Instagram where we spend a lot less time thinking about traditional engagement, things like likes and comments and posts and members and shares on Facebook, and we think of more of those platforms as an advertising channel, so we do a lot of marketing around using things as ads, Facebook ads, LinkedIn ads, email ads, Instagram ads. And we create visual content that would stand on its own and be interesting to look at, but also is tied more towards the type of targeting that we’re running, and we use the creative to really target people and get them to concentrate on a specific franchise opportunity.

Here’s the deal after all that. So there’s three buckets of content we’ve talked a little bit about wherein this is Gary Vaynerchuk talked to the IFA, the keynote speaker. This is a very complex demographic and psychographic world we’re in, and success in advertising on these networks often that are really inexpensive to advertising on which reach millions of people revolves around your ability to, one, target very effectively. So no matter who you’re writing content for, creating content for, creating design for, you have to be really clear on who you’re trying to recruit, and be super specific. Because the more relative you can make it and the more contextual you can make your marketing, the more successful it will be.

And when people get frustrated with Facebook marketing which is ridiculous because that’s one of the best things going in the franchise we’re creating today, it’s often because they don’t stick with it long enough, they don’t understand how to work the leads, or they just don’t understand how to target it effectively. And very few people do in our industry so relatively new frontier for us to go on.

But we really believe that pushing through content and thinking about the demographics and the psychographics and the interesting behaviors and the persona marketing, and other programmatic pieces to content marketing, and tying all that back to your website, is the key to growing in the next five years in franchise development. And companies that understand these concepts and either use vendors like us or figure out how to do some of this on their own, and orchestrate it in a graded approach to, “How do I create visibility for this franchisee that I want to recruit?” are going to be much more successful.

We’re certainly seeing a lot of success with the clients we work with, and that we believe that it’s the future, and we got a lot of reinforcement this year from the IFA on that. So I think the challenge is the targeting, and second challenge is going to be simply that you have to create a just ton of content, like way, way more than we’re traditionally used to marketing.

These are not the kind of … The days are gone where you can put a small amount of content up and let it sit for months or years. You really have to have an editorial calendar for content, and you have to produce hundreds, if not thousands of pieces of content over a time, and be able to roll them out much more aggressively. So that’s the other piece, I think, that dooms a lot of content marketers is they underestimate the sheer volume it takes to get pieces going and to avoid ad fatigue and to be relevant.

Gary Vaynerchuk talked about if he had a retail store, say it was a coffee shop, that he would advertise in one mile radius just on Facebook and Instagram, and he would be really aggressive and spend a lot of money on that. But he would have hundreds of pieces of content and they would be very short run and they would overlap. And he’d have a strategy where every time somebody looked in their feed and they lived in that one mile radius, they would see a different picture, video, image, infographic podcast, whatever it was. But it was a constant stream of new content. It wasn’t the same thing over and over and over and over and over.

So I think that’s the challenge today with content marketing is there’s an opportunity to generate a lot more and a lot less. We certainly saw that with Code Ninjas, the keynote speaker for the marketing session at the IFA who added over 200 units in 2-1/2 years, the majority of through Facebook marketing and generating hundreds of leads a week off of Facebook. It works. It’s not for the faint of heart. It requires different skills on our salespeople and recruiters and thinking about marketing budgets, but we believe it’s worth the effort.

So those are our thoughts on the changing nature of content before our franchise development, and it’s a brave new world, and we’re full of excitement for what’s ahead. And if you’re curious about how any of this works, feel free to reach out and start a conversation with us, and please subscribe to our podcast. It’s available on iTunes, on our website, brandjournalists.com, or on our Buzzsprout page.

Words of advice from the man who has recruited over 10,000 franchisees in his career

by Thomas Scott, CEO of Brand Journalists

I just returned from two really fun days in West Palm Beach, which is just an awful place to go in March, this time of year, it was beautiful weather. I go down several times a year to spend some advisory time at Palm Beach Atlantic University to help with the Titus Center for Franchising, which is one of the only concentrations in the business school in the United States where you can go and actually learn franchising. So it’s always a joy to be around students who want to be in the franchise industry and to get really excited about franchisors who come to participate in that system and help it grow. It’s the future of franchising is really, really bright.

This week the guest speaker in the speaker series that Dr. John Hayes promotes at that school was Gary Findley, a brand journalists client that we’ve worked with for some time to help grow Restoration 1, which is now the fastest growing restoration business. It’s up to 250 units. We started working with them a couple of years ago, just over a hundred units and it’s just continued to grow. It’s highly ranked by Entrepreneur. It’s gotten a lot of attention. Very high same-store sales, very good validation in general, just a really well run restoration company that does some really interesting things in the restoration space.

Most notably not relying on insurance as the main client. So it’s a really attractive brand that’s been popular and Gary Findley spoke in prep for a new book called the Redneck CEO that he has coming out, but also just about his journey in franchising and man, Gary Findley’s the boss. We’re love to have him on as a guest on our pipeline. Gary is well known for starting out at the Dwyer Group when he was a young man working with Rainbow Carpet Cleaning and then jumping on the bandwagon of a really small fitness concept, which was completely unknown and unproven at the time called Curves.

Many of you may know Curves became one of the largest fitness concepts, well over 8,000 units at a tie point back in the day and Gary Findley is the machine behind that and then went on to grow a series of fitness brands, things like Snap Fitness, worked with kids cooking school franchises and a variety of other franchise systems. Has been involved growing Restoration 1 and Blue Frog Plumbing, both brands that we work with Gary on and have enjoyed growing, and it was really interesting to hear Gary speak about franchise development and his tips to an audience of people, who both students and an auditorium full at Palm Beach Atlantic of franchisors.

He had really three takeaways I think are really worth sharing.

Tip1: Be a Subject Matter Expert

The first was that it’s really important to be a subject matter expert and the best way to learn how to be an effective recruiter in a brand is to actually work in the franchise. So he went, he told a story as a young man, he went to the Dwyer Group and said, “You know, I think I’d really like to sell or franchises or be a franchise recruiter. That sounds like an exciting thing to do. I’m very entrepreneurial.” The head person at the time, he’s no longer there, said, “You know, great. Well, I want you to work for one of our franchisees for a year before you sell franchises. You have to understand the business.”

So he ended up managing a truck I think in Arlington, Texas, somewhere in the Dallas area for a year, and the day in day out of learning how to run a franchise. Being very good at running a carpet cleaning truck, of meeting with customers and understanding the value proposition. In that year of time on the truck made him an extraordinary recruiter of that particular carpet cleaning franchise in its heyday and was able to post quite a few deals in a short period of time, because a subject matter expert is really what somebody wants when they began to recruit a franchise.

I think one of the really unfortunate things in our industry is that the average salesperson slash franchise recruiter is very out of sync. I think franchise navigators stat that we’re really fond of, is 65% of the salespeople and franchising are out of sync with their buyers, out of sync from a personality standpoint, out of sync from an experience standpoint, from a generational standpoint, but most importantly they don’t really understand what it is to be a franchisee in a system.

They understand how to explain the business at a high level, but when you’re talking to somebody who’s owned and operated a business or who’s worked deeply day in day out in a franchise, they’re going to know things about that business that make it come to life in a very positive, reinforcing, and enthusiastic way that propels people through the process. So that was his number one takeaway, was that it’s super important to have worked in the business and be a subject matter expert. He was a big believer in that.

Tip 2: Take the Time to Go The Extra Mile With Prospects

His second one was believe that you’re going to sell. Believe that people will find a way to buy your business and don’t be afraid to meet people where they are. He told a story about how with Curves, he went on spring break right after he started this job as the VP of Development at that little tiny brand and took his family out to Colorado from Texas, and went on spring break and he had only three franchise inquiries. That was all he had. It was just three. He thought, “Well, I’m going to be in Colorado.” They’re all like, one’s in Durango and one’s in another town and they were all close by and so he said, “I’m going to go meet with all three of these people in person since I’m going to be there” and go out of your way to take some personal time and get to know a person.

The very first person, he said no, he didn’t have fancy brochures. Like the brochure looked like a ransom letter. It was really, really poorly created, but I went and met with the person over coffee, and I explained the business, and at the end of the conversation she goes, “I’ll take it. I want it. I want that. That sounds like an amazing business to own.”, and he was kind of shocked, but he didn’t think that she would have recruited, would’ve bought the franchise otherwise.

But the personal interaction and the face time really solidified their relationship because you do have to be an honest person, and a straight shooter, and an enthusiastic recruiter of the brand that you’re working in. So he said, well that must have been [inaudible 00:06:01]. Nobody sells their first inquiry just like that and he went to the second person in Colorado and that person also wanted it. In fact, that person wanted it so much, she didn’t want Gary to go to the third person, who also ended up buying. So he met with three people and sold three franchises and three or four years later, Curves was at 8,000 locations.

So it sounds easy, but what he did in that scenario and he was encouraging franchise salespeople to do, is don’t get outside your box. Make yourself physically available to people, virtually available to people, go the extra mile so that you can actually get to people and get in front of them. That personal connection is often what propels somebody to buy a business. I think that’s so wise in today’s world. Whether that means texting, or if you’re traveling, or if you can do anything you can do to get somebody in person, that becomes a real transaction and you do that.

Tip 3: Build a Team and Use Outside Help to Speed Up Momentum

The last one was very important. He said, “People ask me how did I add 8,000 units at Curves and how have I doubled and tripled the size of Restoration 1 in such a short period of time?” His answer was simply, “I learned this at the Dwyer Group, is you have to build a team.” Like one person can’t grow a system, you have to build a team. The team may be outside vendors that you trust, very similar to the relationship we have with Gary and his brands, or people who are in the industry who know what they’re doing. Salespeople and recruiters, you can work with an incent and pay well to help you hit your goals. Just that you have to build a team, like growing any franchise brand and doing all the stuff that you need to do to make it a success, takes a really tightly controlled team.

Everybody has to be culturally on the same page and work together, but that if you’re going to scale a franchise business, the mistake that most people make is they just don’t build a team. They don’t think they can afford it. They don’t know how to make it.

He’s well known for doing a hundred percent commission sales and I know on Restoration 1, at some points we have five or six salespeople working on that account, mostly on a commission and they’re very well compensated, but he’s able to grow by generating leads and really giving back to the people on his team and making it worth their while to invest the time and effort into it.

It was a really great speech. We’re really hopeful to have Gary on our podcast and I think it was very interesting to listen to him talk about how he’s overcome failures in his life and had successes. Now we’re very much looking forward to his new book, the Redneck CEO, but those are our three takeaways from listening to Gary speak at the Titus Center for Franchising this week.

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Scott Named to Titus Center Board of Advisors

Brand Journalists’ CEO Thomas Scott has been appointed to the board of advisors of the Titus Center for Franchising, a center of excellence based at Palm Beach Atlantic University.

The Titus Center provides franchise-oriented academic coursework leading to a bachelor’s degree with a concentration in franchising. The center is housed in the university’s Rinker School for Business, and also offers certificate programs in many areas, including:

  • How to buy a franchise
  • How to franchise a business
  • Franchise marketing and sales
  • Franchise operations
  • Franchise field support
  • International franchise expansion
  • Master franchisee development

The center also offers a franchise internship program, as well as shadowing opportunities at the franchise world headquarters of United Franchise Group. Since its first semester of operation in fall 2017, it has attracted more than 40 students, several of whom have said they plan to become franchise owners and even franchisors.

As part of his board duties, Scott will be contributing content and other resources to help drive the center’s mission, as well as mentoring students and working with faculty to help strengthen and expand the center’s goal of becoming a leading choice for franchise education in the United States and internationally.

“Thomas is one of the leading practitioners in franchising today,” says Dr. John Hayes, Titus Chair for Franchise Leadership and the center’s director. “His insights about the motivation of prospective franchisees, and the tools that franchisors can use to develop relationships with both prospective and existing franchisees, is unparalleled in our profession. For those reasons, along with the quality of his character and his desire to network with professionals, I asked him to join the Titus Center for Franchising Advisory Board. All of our advisory board members, including franchisors, franchisees and suppliers, and students of the Titus Center, will benefit from Thomas’s knowledge and gifts as a thought leader in our profession.

“The Titus Center’s mission of integrating the world of franchising into a business-school setting is an excellent way of creating tomorrow’s franchise leaders, and I am very happy to be a part of that vision,” Scott says. “The advisory board and faculty are an outstanding and very learned group, and I look forward to engaging with them, and the students, and digging into the smart business practices it takes to make a franchisee or franchisor successful.”

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