Founder of WeFranch, Forbes Business Council Franchising Group Member Leader, 2023.
Legendary franchises were founded by people just like you: visionary entrepreneurs with an irresistible concept who are eager to expand. The cornerstone of this expansion lies in attracting good early franchisees and setting them up for stellar success. Word of mouth travels fast, and as partners often invest their life savings into a franchise, they will likely seek social proof from current operators.
Before you become an established franchisor with the resources to invest in corporate marketing, receive awards and develop a franchisee recruitment process, you must secure your first franchisees. Here are six growth hacks I’ve gleaned from my own experiences in the industry and from the playbooks of seasoned franchisors.
1. Market your franchise as an entry ticket to a prime location.
One of the major benefits of investing in an emerging franchise is the opportunity to own prime territories with significant spending power. Franchise territories are an asset in themselves and can provide long-term exclusivity and protection for franchisees in lucrative geographic areas. When selecting a strategic location, consider market trends, competition in the area and infrastructure analysis to ensure the location is sustainable in the long run.
However, established franchising giants like Crumbl Cookies, which has over 600 locations across the U.S., may have saturated the most desirable locations. If you’re a new franchiser, consider creating a more franchisee-friendly version of an existing concept with a proven success record. This way, franchisees seeking to enter a given prime location will be more interested in considering your business. For example, Dirty Dough offers franchisees who were unable to secure a Crumbl store an opportunity to offer a similar product in a given location. Additionally, Dirty Dough utilizes centralized cookie production, thus allowing franchisees to open locations at a lower cost and with less labor.
2. Recruit franchisees from your customers.
Your customer base can be a goldmine for potential franchisees already passionate about your brand. A number of franchises have been opened by customers who love the experience of a favorite store and want to run their own branch. Take Javier Martinez, a Subway and WaBa Grill franchisee with 16 locations, who signed a multi-unit deal for 25 Randy’s Donuts stores in Los Angeles County. Martinez wasn’t searching for a dessert franchise but was impressed by the popularity of Randy’s Donuts in Torrance and saw potential in getting it off the ground.
To tap into this resource, I recommend encouraging referrals and scouting for prospects among your regular clients while creating opportunities for interested customers to personally connect with you.
3. Target experienced multi-unit franchise operators.
Another way to accelerate your franchise’s growth is to focus on attracting seasoned multi-unit operators with proven success in the industry. To find multi-unit franchisees, attend industry events like the Multi-Unit Franchising Conference. Connecting with established franchisers in adjacent concepts or joining seasoned franchisee networks is another way to get introduced to potential partners. For example, the Upstart Coffee franchise Seven Brew massively expanded due to the Jimmy Johns founders’ introduction to his franchisees. However, it’s worth noting that Jimmy Liautaud, who was promised a share in Seven Brew in return for this help, is now suing Upstart Coffee (subscription required), a reminder of the importance of making sure you have clear legal documentation before securing such partnerships.
4. Incentivize early franchisees with quick profitability.
Generous terms and reduced startup costs are great ways to incentivize early franchisees. Unlike established brands, emerging franchises are riskier for franchisees. Helping your franchisees have a smoother start and faster wins can be crucial in winning them to your side. This might look like offering a staggard fee structure with discounted fees so your franchisees can reinvest in essential areas like marketing and team development. Another example is that of Mosquito Joe’s, whose franchisees benefit from operational and technical support that allows them to focus on marketing and differentiate themselves through outstanding customer service.
5. Ride on the shoulders of social media giants.
By creating a visually appealing, Instagram-friendly concept, franchisers can encourage customers to share their experiences and thus catch franchisees’ attention. One example of how a business can benefit greatly from social media exposure is Mr. Fries Man. When rapper Nipsey Hussle posted a photo of their loaded fries on Instagram, the business saw a surge in followers, customers and franchise requests
To encourage social media sharing for your concept, focus on creating visually stunning products and experiences, such as unique decor or photo-worthy backgrounds. Provide your customers with a phenomenal experience and incentivize them to share it, and you’ll likely see an increase in your brand’s exposure.
6. Attract franchisees with a full tech stack.
By providing a tech-enabled proven business model, franchisers can appeal to customers who value speed and convenience and give them the tools they need to succeed in today’s competitive market. Tommy’s Express Wash is a prime example of a franchise business that has embraced technology. Their membership app and member pay lanes make the washing experience efficient and hassle-free, which not only improves customer satisfaction but also provides valuable data to help franchisees optimize their operations.
In summary, treating your first franchisees as customers is crucial to success. Ensure they excel by understanding their needs and crafting an irresistible concept that appeals to them. Ultimately, as you focus on fostering franchisee success, they will contribute to transforming your emerging concept into an established brand. Remember, your next franchisee might stumble upon your concept through social media, a conversation with a friend, or an unforgettable experience as a customer interacting with your brand, so stay alert for new prospects.
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