Jonathan Pace Thinks You Should Spend Your Development Budget Getting to Know Candidates in 2020

Jonathan Pace is a Chicago-based franchise consultant and business broker, currently serving as the president of On Pace Franchise and Business Advisors.

Pace founded the consulting company in 2015 after identifying a frequent disconnect between the employees and owners of retail franchises. On Pace Franchise and Business Advisors brings years of experience from both sides of the franchising table to its consulting work, achieving measurable results for clients based on a deep understanding that franchise success doesn’t just come from the top down, it must be instilled at every level of the business.

1851: How did you get involved in franchising?

Pace: I started out in the franchising industry as a manager of Moe’s Southwest Grill, eventually moving over to the corporate side and opening units with Smashburger. Through training countless franchisees from all over the U.S., I realized I had a passion for matching people with their ideal business. 

Although I liked the idea of franchise consulting, I didn’t have a good understanding of the financial side of the industry. My business partner, Michael, had his CPA license and extensive accounting experience, so we decided to start a business together in which we’d be able to help connect franchisees with the correct brand based on their background, interests and goals.

1851: What's working for your clients in 2019 that you recommend spending on in 2020?

Pace: First of all, it is never a bad idea for franchisors to hire outside consulting. Firms like On Pace specialize in placing franchisees and are able to add value by bringing the brand prime candidates. Oftentimes, franchisees already know the kind of opportunity they are looking for, so consultants like myself make sure these candidates are able to connect with the right franchisor. While a business can always attract franchisees based on sales, the candidates who are passionate about the brand will always be more successful. Consultants are able to bring vetted, passionate candidates to franchisors on a silver platter. In the long run, it is important to remember that franchisors make more money off of royalties, not the up-front fees.

Here’s an example: I had a candidate interested in purchasing a neighborhood Subway or Cold Stone Creamery operation. After I discovered she had a love for financial services, I brought her attention to the bookkeeping franchise Supporting Strategies, which ended up being the perfect match. Without our consulting, clients are unaware of how many opportunities there are out there. 

Internally, franchisors should be spending their development budget on profiling tools. If you are able to profile the most successful franchisees in your system, you can use that data to target new candidates. Through franchisee testimonials, candidates are able to identify with these success stories. 

1851: Where can franchisors lighten their budgets or remove spending from? 

Pace: Franchisors often spend too much on fancy lead portals. Instead of flashy ads meant to appeal to as many people as possible, spend money on attracting quality franchisees. There is no need to draw the attention of everyone; the candidates who really want to be a part of [a brand] will find it. The franchise should sell itself through the attractiveness of the model and the testimonials of successful franchisees, not the flashy sales information. Brands don’t need to be spending a ton of money on glitzy ads or flying everyone out to their extravagant headquarters—it is more about having a quality team and franchise system in place.

1851: What's the biggest trend you're seeing when it comes to franchise development budgets and spending? 

Pace: Technology, of course, has become a defining tool in how franchisors look for the right candidates. The biggest trend I am seeing currently is franchisors putting money into social media targeting and SEO to find people that are qualified and interested. As more brands grow their presence on social media, we will continue seeing an emphasis on online content. 

1851: What's an area in which franchisors commonly overlook or spend too little? 

Pace: Brands need to spend more money after they’ve gotten an inquiry. It is important to have a really good online platform, with all support and resources in one place. The best franchises out there create an online university, educating candidates on the fence to make them feel comfortable investing.

1851: Where do you advise franchisees to spend their marketing budgets on the local level?

Pace: A majority of the marketing budget should be allocated toward local activities. Get your name out there in the local chambers or networking organization, using your marketing budget to show people in the community that you are committed. Each area should feature a hyper-localized social media strategy that spotlights the specific store instead of the entire franchise brand.