Powills: The Real Secret to Franchise Development

You know those infomercials where you are instantly pulled into whatever new product is being sold for $19.99 (oh, and you get a free knife set, too)? Well, my headline was just that. Chances are that if you have made it this far you are already hooked. You have already read 60 words waiting, praying and preparing for this real secret to franchise development. I am sorry to disappoint you. You will continue waiting. And frankly, I apologize, for I lied. The difference between my lie and the lies of so many franchise suppliers who claim to have the magic tool is that mine is contained to this column’s headline – not to real life and real money. Are you still reading? Let me continue. Here’s the real secret: There is no secret to franchise development. Unfortunately, though, at every turn in the franchise community, there is someone talking about this secret. It seemed as if franchise portals were the secret. Nope. It seemed as if websites were the secret. Nope. It even seemed as if PR was the secret. Nope. The fact is, not one thing will ever create magic for your growth. Not even if you're a self-serve froyo concept right when self-serve froyo concepts are popular. The reality is every franchise deal comes with a price tag for a franchisor. Some experts say that tag could be between $8,000 and $12,000. I tend to agree, yet the science for every brand is different. A childcare franchise could cost $20,000/deal whereas a wireless retailer could cost $2,000/deal. However, every deal comes at an expense because franchising is competitive and rarely do prospects only look at one brand. Of course, there are exceptions to the rule. The start to the secret is that every deal has an expense. This is important for CEOs who want their development teams to add 565 units in the next five years. In order to do that, you are going to need millions of dollars to do so – and even still, it’s not that simple. I recently asked a franchisor what their ideal franchisee read. They didn’t know. But because of curiosity, they were interested in finding out. Thus, we asked the question to their mirror franchisees (i.e., franchisees they wanted to duplicate). The data we received is simple, yet amazing. It teaches us where the franchisor should spend the dollars to at least give a brand a fighting chance to be invited to the business dinner table. As a franchise brand, do you have this data? Next, you have to take the dollars and measure them against the data. When you place an ad in a franchise trade, what is the outcome? Don’t know? Then you are not ready to develop your franchise. Far too many times, franchisors spend dollars without data and tracking. That’s the true secret to development: there is no exact science to driving deals. One size does not fit all. Stop using the terms trick or secret, or my all-time favorite, magic bullet. Those are all franchise unicorns (if you don’t understand the connection to a unicorn, you should probably stop reading). Trust me, I want every franchisor I meet to be wildly successful. I want their dreams of awarding 500 units to come true. Frankly, that would make me look like a PR genius. However, you cannot even begin to take a shot at franchise greatness without proper data, a proper plan and proper tools. And then, even with all of those great tools, good luck growing if your current system doesn’t validate for you. My advice is to create a great Item 19 using real data. If a franchisee inquires and asks about averages, they won’t be great, they will be average. Showcase what your best locations/units do. Be proud of the fact that you have high performers. Crave more. Also, don’t always say yes. Say no sometimes. Play hard to get. Let only those who you want to be in a long-term relationship with in your house. Period. Franchise sales is not difficult. To recap:

• Treat your great franchisees great. They will validate for you.
• Be proud of your top zees and celebrate them in your Item 19. When someone asks how much they can make, have a real answer (legally).
• Be okay with saying no. Not every person is great for your brand. Protect it. Whether you are in sales or you are the founder, have a system of approval. It will make you more money in the end.
• Royalties make you money. Franchise fees shouldn’t keep the lights on. Strive to make more money through the greatness of those who proudly bought your brand.
• When you grow, understand there is a cost to growing. The saying of “it takes money to make money,” is absolutely true. Figure out your cost per deal and budget that against how many units you want to add.
• Collect data on what your great franchisees read. If you know this, you won’t blindly place ads. Chances are you are spending dollars in places where none of your great franchisees play. Change is okay.
• Measure your successes and failures. Be okay with changing. Don’t commit to long term ad contracts if they don’t move the needle. However, understand that not all data is created equally. It will take many impressions for someone to inquire. That means that if they told you they heard about you through Google, they probably saw your sign, tasted your food, read about you, visited your Facebook page, talked with a franchisee, saw a competitor, read about you on a portal, heard about you from a broker, and then inquired and told you it was Google. Dig deeper.
• Most importantly, stop asking about that damn magic bullet. There is nothing new in franchise development – it’s all about the fundamentals and doing them really well. To be great at franchise sales, you don’t have to have one thing work great; you need a bunch of small things that work well.