Five Ways to Ensure Strong Validation and Fuel Franchise Development

All franchising brands share a common goal: to sell units to local business owners. But before a brand’s development efforts can take off, prospective franchisees need to be shown that after they sign on the dotted line, they’ll be set up for success.

That’s where the validation process comes in. By providing franchise candidates with Franchise Disclosure Documents, promotional materials and testimonials, brands are able to prove to entrepreneurs that their business opportunity is the right one to take. However, franchise validation doesn’t stop on the corporate level—prospective franchisees typically rely on outside sources and research to tell them whether or not a brand is on the right track. What they find throughout that process can then make or break their decision to invest.

In an article for Franchising USA, David Banfield, president of The Interface Financial Group, said, “Validation is not an exercise to be taken lightly or pursued in a hurry to get it finished. Validation is usually the end of your due diligence process, and is often the element that tells you to go ahead or pull back.”

Here are five things brands can do to validate their businesses, ultimately opening the door to more franchise sales:

Check In with Your Franchisees

For prospective local business owners, the first step in the validation process is to get in touch with a brand’s existing franchisees. Whether they set up an in-person meeting or arrange to talk to an owner over the phone, there’s no better way for candidates to learn about a brand’s franchise system than by getting first-hand accounts from people who are already successfully operating within the system.

That’s why it’s important for brands to perform temperature checks with their franchisees. When current owners are happy with their brand’s business model and are seeing their sales increase, they’re going to encourage other entrepreneurs to invest with the brand. It’s crucial for both current and prospective owners to know that the lines of communication between a franchisor and its franchisees are always open—at the end of the day, franchisee feedback helps guide the brand’s future development efforts.

Highlight Unit Openings, Resales and Expansions

Franchise brands’ performance records—including store openings, resales and expansions—also validate successful businesses. It’s crucial for prospective business owners to know they’re joining a system with forward momentum.

“It’s essential for franchisees to know how consistent a brand is when it comes to store openings,” said Pete Lindsey, vice president of franchising for Sport Clips*. “Too few store openings can indicate that there’s a lack of interest or a lack of existing franchisees willing to expand. Too many openings, on the other hand, can mean that brands are compromising their standards when it comes to site and franchisee selection.”

Store transfers and expansion rates also speak to the overall health of a franchise brand. If there’s too much turnover, candidates might reconsider making an investment. However, if there are existing franchisees who are deciding to grow with the brand by pursuing multi-unit ownership, it shows that the brand is doing something right. One brand that highlights its expansion rate is Miracle Method, the nation’s largest professional bathroom and kitchen refinishing franchise.

“The fact that our franchisees are electing to expand their territories with us is a great indicator that our system is healthy and headed in the right direction,” said Erin Gilliam, Miracle Method’s marketing manager.

Demonstrate Corporate and Vendor Support

Validation goes beyond a brand’s system of franchisees—prospective owners also want to make sure that they’ll have the backing and support they need to succeed from the corporate team. That’s why brands should also provide candidates with information on the initial and ongoing training services they offer. Future franchisees should leave the validation process with the confidence that they’ll have access to numerous resources, from marketing programs to established connections with suppliers.

Encourage Innovation

Franchisees also want to know that the brand they’re investing in is keeping up with the latest industry trends and best practices. Innovation can happen across a franchise system in a variety of ways—from advanced mobile apps or point of sale systems to new loyalty programs and customer feedback platforms. No matter what a brand does to separate itself from the competition, having tools in place to stay ahead of the curve demonstrates positive forward momentum.

Actively Manage Your Digital Footprint

It’s no surprise that prospective business owners research franchise brands online before making an investment. But brands don’t have to limit themselves to the comments or reviews that are already floating around the internet. By actively shaping the message surrounding their brand with the help of advertising and PR agencies—and even content marketing platforms like 1851 Franchise—companies have the opportunity to manage their digital footprint.