How Franchisors Can Speed Up Franchise Sales for the Second Half of 2022

Mainland* — a marketing and communications company and 1851 Franchise’s publisher — recently hosted a Coffee and Analytics webinar in which CEO Nick Powills walked through the company’s data-driven findings to explain how brands can boost their franchise sales moving into the back half of 2022. 

“Many brands are hitting the midpoint of the year and wondering what they can do to accelerate growth,” Powills said. “They may feel the pressure of trying to get deals done, and they may not be at the flow they expected at the start of the year.”

What Messages to Focus on Right Now

If leads are slow, Powills says brands need to evaluate several factors, one of which is the current economic climate. 

“With inflation, labor challenges and rising gas prices, many candidates might be asking whether now is the right time to get into franchising,” Powills said. “The short answer is ‘yes.’ With franchising, you are not playing for today. You don’t purchase today and open today. The timeline to opening could be anywhere from eight months to a year, which means franchising is about playing for the future. Franchise sales are in the moment, but their impact is in the future.” 

When talking to candidates with this in mind, Powills says franchisors need to ensure they deliver content that eliminates the fear of what is happening right now in the economy. “Wealth builders buy low and sell high,” he said. “The recession won’t last forever, and candidates need to understand that they are buying now, but they are investing for the future, which will drive a better ROI in the long run. If you don’t have a piece of content that tackles where we are today in the economy, you need to make it.”

Another factor that may slow down franchise sales is the business model, Powills says. “If the topline volumes aren’t what you think they need to be to sell franchises, franchisees aren’t validating, or the cost to get in doesn’t align with the return, you need to start thinking about how you can make the investment model more attractive for next year,” he said. “We can put bandaids on brands that may not have the best business model, but you can only fool people so much. You need to have a business model that will bring people forward faster.” 

According to Mainland’s data after interviewing nearly 300 franchisees across its client portfolio this past year, it takes candidates an average of 6.4 months to go from inquiry to impression — but that timeline changes significantly depending on the investment level. For investments below $150,000, that timeline can be closer to the 90-day mark. For those in the $250,000 to $500,000 range, it is more like three to nine months. Concepts above the million dollar mark see an average inquiry-to-impression timeline of above nine months.

While fixing the actual investment model will likely take time and require many hard conversations within the leadership team, Powills says there are a few ways to speed up franchise sales in the meantime. 

“For one, you should look through your network of franchisees, find the highest performers, and put energy around those to leverage their stories,” he said. “That way, when the candidate is going through the process of validating the business, they are talking to those who are doing the best. You should also put 75% of your franchise development spend towards those target markets that have proven to be successful and have room to grow because you already have stronger volume, good opportunity and a validator.” 

Another strategy is to focus on consumer-facing messaging until the business model is fixed, as the customer still has a passion for the brand, and that is a currency in the franchise sales world. “If you are an ice cream brand, for example, you have a passionate customer base that could be full of potential franchise buyers,” he said. “This is going to be different for every brand but does have the potential to boost franchise sales. Some brands don’t want to put franchise messaging in front of customers, which is understandable, but it is important to understand that consumers may be the pathway to least resistance for certain concepts.”

This consumer-facing approach can also be done by highlighting the stories of individual local owners, Powills says. “McDonald’s did a great job with elevating their owner-operators,” he said. “Is there anything in your brick-and-mortar location that provides customers with information about the owner? Should there be?”

Sales Funnel Opportunities

Once franchisors have optimized their messaging for bringing leads in, it is time to look at the sales funnel, Powills says. 

“There are three types of buyers coming into your funnel: first-time franchisees, existing franchisees within the system, and franchisees from other brands,” said Powills. “For each of these, franchisors need to build content, as well as specific pages on their franchise development website, that gives prospects the tools to validate the business.” 

First-time franchisee prospects — who Powills says will likely make up 75% of signings in any given year — already have the capital; they just don’t know how to be a franchisee. This means franchisors need to teach them about the industry, the support infrastructure and the scalability. 

When it comes to existing franchisees potentially looking to purchase another unit, franchisors need to be proactive about communication. “You could host a seminar or webinar sponsored by the franchise development team about how to grow within the business, just to see who shows up,” Powills says. “They may not be ready to buy right now, but eventually, they could be. Either way, all franchise candidates coming in should know that others are growing within the system and that the opportunity is there.”

In terms of multi-unit, multi-brand franchisees, Powills says these are often considered the holy grail of franchise sales. “Every franchisor is going after these candidates,” he said. “That means you are competing against everybody, not just those in your category. Maybe plan to sign one of these multi-brand owners a year. But if you are looking for franchisees fast, finding those who are already along the funnel of another brand can be a great strategy because they are already familiar with the franchising process. This can be done with interceptive content, usually through pay-per-click campaigns.” 

Individual Phases of the Funnel

Within the actual funnel, there are several phases that franchisors should be considering when looking for ways to speed up sales, including franchise research, category research, brand research, active leads, qualified leads and close leads. “There is crossover in each, but building out at least one piece of content — whether it is an email, video, article, PR placement — for the user in that phase of the pipeline will help candidates better understand your POV,” Powills said. 

For example, prospects in the “franchise research” phase are those who simply need to be better informed about the franchising industry at large. “Most brands miss out on that when creating content, but you can mix in the benefits of your individual concept with the benefits of franchising in general,” Powills said.

Those prospects in the “category research” phase need to be shown why the category is strong and why the franchisor stands out against competitors. Those in the “brand research” phase need to be kept informed about the leadership team’s vision, the franchisee validation, the investment level and everything else about the concept. 

Then, once prospects have officially applied, they are considered an active lead. “In this stage, the franchisor needs to be creating content that makes them feel comfortable and confident in their decision,” said Powills. “Maybe schedule a time to talk one-on-one or send an email asking to follow up.”

When the prospect is qualified financially and in their territory, they are a qualified lead and need to be sent information about what the process will look like moving forward. “Make sure you are diligent and organized on scheduling,” said Powills. “Keep that candidate moving through the funnel. You could have a 90-days-to-close checklist that walks them through their next steps. This list can be aggregated from the best practices and experience of existing franchisees.”

Even after the franchisee is signed and becomes a closed lead, Powills says franchisors can’t stop the flow of content. “A lot of brands make this mistake,” he said. “Once you close the deal, keep them going, talk about expectations, how you scale with the business, etc.”

Powills notes that franchisors should also get in the habit of recontacting cold leads. “These are people who are already interested in the brand, which is often the hardest part of franchise sales,” he said. “With cold leads, you just have to convince prospects ‘Why You/Why Now?’”

Overall, Powills says franchisors certainly have plenty of opportunities to reach their franchise sales goals of 2022, even if the first half of the year isn’t going as planned. “Can you sell franchises fast? The simple answer is yes,” he said. “There are franchisees who are going to buy today, tomorrow and the next. How can you intercept them and convince them to choose you? Everyone can win at franchising; you just need to get the right information in front of the right people. Once you do that, you can start to build up that funnel as we turn to the rest of the year.”