FranConnection 2016: Winning at Franchise Development; What to Know About Closing the Gap

Sean Fitzgerald, chief development strategist for 1851 Franchise and Scott Oaks, vice president of franchise development for BrightStar, debated best practices in lead generation.

By Nick Powills1851 Franchise Publisher

SPONSOREDUpdated 11:11AM • 05/19/16

The hunt for the mystical franchise sales unicorn continued at FranConnection 2016 as an expert panel moderated by FranConnect’s President Keith Gerson and led by Sean Fitzgerald, chief development strategist for 1851 Franchise, and Scott Oaks, vice president of franchise development for BrightStar, debated ways to close the gap in lead generation, marketing and effectiveness.

The discussion started with a few key stats from Franchise Update Media Group, highlighting some survey stats from its annual Franchise Leadership & Development Conference:

60 percent of brands that attended the conference tracked cost per lead

$97 average cost per lead

58 percent of brands that attended measured cost per sale

$6,300 average cost per sale

“These stats are a good starting point, but stats and data will vary by brand size and awareness,” cautioned Fitzgerald. “The reality is brands rarely set aside a proper budget to achieve their sales goals.”

Robert Stidham, president of Franchise Dynamics, echoed that opinion based on data from his clients.

“The cost per lead makes sense, but franchisors will need various budgets to accomplish their desired franchise sales goals. Those stats will change, especially if you have a blend of multi-unit sales in your channel or if you are an established brand.”

The panel used the above stats as a barometer for franchise sales planning, in that if a brand wants to award 50 units next year, they will need some sort of multiple of a budget in order to accomplish that goal.

“Most franchise brands use an $8,000 to $12,000 per deal range as the starting point for developing a budget for accomplishing sales goals,” Fitzgerald said.

During the discussion, it was clear that the outlets in which franchisors spent money varied. Still, portals seem to be a part of the spend mix.

“The portals are consistently at $40 to $60 per lead,” Fitzgerald said. “Everyone is saying that portals are not as effective as they were, but, it depends how you are using them. Some are using it simply as building a digital footprint, therefore, measuring only a cost per lead will not be truly definitive of the success of that campaign.”

Oaks said he used a multiple touch point plan, in which he leveraged a little of everything to create the right awareness for the prospective audience.

“We use PR, marketing and advertising so that we can have the best chance at putting our message in front of as many prospective franchisees as possible,” Oaks said.

Blocking and tackling seems to position brands best for winning at franchise growth.

“Having a very detailed process, utilizing a tracking tool like FranConnect, and marketing your defined positioning will best set you up for winning. There is truly no silver bullet in sales. It’s doing the fundamentals really well. You will never be able to know that if you spend X you get Y with franchise sales. Validation and marketing of the opportunity in many places will give you your best chance at feeling good about your growth,” Fitzgerald said.