1851 Franchise interviewed development leaders from five franchises that boast impressive numbers of multi-unit franchisees to learn how their brands market new units to existing owners
Multi-unit franchisees are an essential component of any brand’s growth strategy. A new owner who is ill-equipped to operate a store or represent their brand can cause irreparable damage to a franchise, particularly a new or emerging franchise. Those risks are all but eliminated by new store openings from existing franchisees, who require less training and vetting, know operations inside and out, and have a demonstrated passion for the brand.
1851 Franchise spoke with Glen Snyder, Chief Development Officer at Green Home Solutions; Mark Cairns, Director of Franchise Development at Toppers Pizza; Greg Goddard, Director of Development and Franchising at Penn Station; Fabian Martinez, Director of Franchise Sales at Honest-1 Auto Care; and David Wheeler, Chief Development Officer at Solcioty about how a brand can increase their number of multi-unit franchisees. Here are their top five tips on marketing to existing franchisees.
1. Keep an open line of communication with franchisees
By far the most common piece of advice we heard was to keep an open communication channel between franchisees and the corporate team. A brand’s development team needs to know how each franchisee is thinking about their own growth before they start to promote any expansion opportunities.
Glen Snyder: It all comes down to communication. You have to understand the aspirations of every single operator so that you can help them grow the way that they want to.
Mark Cairns: We are always focused on maintaining communication with our owners. We call them and set up face to face meetings as often as possible. We do regular business reviews so that we understand where they’re at and to help show them what kind of position they are in for potential growth. By maintaining those relationships, we know exactly when a franchisee is ready to grow and by how much, and we can grow together as a team.
2. Emphasize expertise
One of the primary benefits of growth within a franchise system is that owners already know the operational requirements of the business. Without having to learn any new processes, a franchisee’s second store can become successful far more quickly than their first.
Glen Synder: Existing owners understand the value of the brand, they understand the work that goes into running a store, and they understand how customers engage with the brand. By leveraging that knowledge, franchisees can get new stores off the ground right away, which reduces their investment substantially.
Greg Goddard: Franchisees look for things that they can control, like labor and inventory. Within the franchise model, they want to be able to optimize those things. When a franchisee opens an additional store, they know the areas where they’ve seen room for improvement, and they can launch those improvements right off the bat.
3. Don’t push
Franchisees are largely aware of the benefits that come with adding additional units, and they don’t require much convincing. An aggressive push from the development team can damage an owner’s relationship with their brand or push a less experienced owner to take on more business than they are prepared for.
Glen Snyder: There is no magic curtain hiding the secret benefits of multi-unit ownership. Franchisees know exactly what they are getting with a new unit. So if they don’t feel they are ready, they probably aren’t. Every owner has a capacity for what they can successfully manage, and if we try to sell additional units to a franchisee who is not interested in growing, we are going to end up with an underperforming unit and a miserable franchisee.
Fabian Martinez: We believe that the model really speaks for itself. An experienced franchisee has seen the model in action, and they know firsthand how successful they can be with it. For prospective first-time franchisees, we’ll use a targeted knowledge-based campaign to help show the benefits of our model, but existing franchisees don’t need any new info, they just need to know that we are here to help them grow when they are ready.
4. Focus on the expanded customer base
In addition to providing owners with a new batch of customers, additional units also extend brand awareness, which can result in a boost in customers visiting the original store as well as new ones.
David Wheeler: By expanding into multiple locations, franchisees are developing brand awareness. They are making the brand accessible to customers who may not have even been aware of it before. The more exposure that the brand gets, the more business each individual unit will see, so business grows exponentially with each new location.
Mark Cairns: When discussing growth with existing franchisees, we always come with market research and area development plans to show that we are not simply interested in growing out in any direction; we’ve got a deliberate strategy to position the owner and the brand for success. We’re always trying to place new stores in areas where there’s going to be a lot of enthusiasm for the brand.
5. Show how growth is part of the model
Franchise models are built to scale. As soon as a prospective franchisee signs on to own a unit, they are already positioned to expand. It’s important to emphasize to owners that their growth is part of a plan.
Mark Cairns: We encourage franchisees from the very beginning to prepare to build out a market. The model is designed to spread to several stores and area supervisors. Owners have to be confident that the business is built to accommodate their growth and won’t collapse from a lack of resources.
David Wheeler: Franchise models are built around brand exposure. Expansion strengthens the brand and increases marketing. A stronger brand means more support for the franchisee in virtually every way.