April 2008 Franchising World

Developing a clear communication plan for a target audience offers a powerful advantage for finding franchise growth partners.

By Salman Siddiqui

For most companies, growing business through franchisee capital is often an attractive option when resources are scarce or investment capital is limited, or the need exists to lower the company’s exposure in brand development. In such scenarios, franchising models become very attractive.  However, some companies do extremely well in harvesting and expanding their franchising systems while others struggle, making mistakes and eventually lagging behind.

Why? Most business leaders understand this basic premise of franchising. However, while formulating the business plan, the amount of pre-work required building a growth strategy, a business case and a coordinated communication strategy to excite  franchisees is often under-estimated, which ultimately causes execution problems or translates into less desirable results.

What’s the best way to communicate with franchisees?
Communication methods are mostly very elementary and intuitive. A targeted communication or marketing plan, with a sound growth strategy and a working business model should result in a surge of inquiries from prospects.  However, harvesting these prospects and turning them into franchisees and building a replicable network requires a deeper understanding and readiness of the franchise’s staff and systems. Some questions to consider include:

• What is the targeted future network and business model for the firm?
• Who is and is not the audience of the message?
• Are systems and resources prepared for the surge and to carry it through?

The ways to communicate expansion opportunities with franchisees, new or existing, depends on the desired growth model.  A small company with a moderate growth plan and a sound business model may look to expand through small networks and rely on its existing franchisee base as a dominant vehicle.  On the other hand, a small company looking to expand through larger networks might have a different communications plan and strategy to reach its audience. One possible way to look at various franchising options is: (See chart on page 25).
 
Following are some of the possible methods utilized to communicate franchising opportunities with the franchisees. Depending on a company’s growth plan, size and resource commitment, some or all of these strategies could be utilized to develop a comprehensive communication plan that could be the launching pad of all external communication with the franchisees.

National/Regional or Local Meeting
Franchisors usually have quarterly or bi-annual meetings with the existing franchising base to communicate, update brand standards, and assess progress, issues and changes within the system. These meetings are usually held by local market team leaders, such as regional managers and vice presidents, with cross functional support teams.

For a successful franchise system looking to expand through existing qualified franchisees, this can be a good forum to communicate new opportunities of growth or requirements.  On the other hand, franchisees selling their businesses may be reluctant to discuss their willingness to sell in a public forum. These nuances should be considered before communicating existing assets for sale in a public forum.

Utilizing the World Wide Web
Internet-based communication is a cheap and effective way to reach out to prospective franchisees. Almost all well-known franchisors have company Web sites that are used to communicate existing and new franchises for sale, information about the franchising program, general requirements specific to the brand and that also serves as a resource to take applications from investigating potential franchisees.  It is also a cost-effective way to answer many questions and afford cheap pre-screening.
 
Today, having a Web presence is almost a requirement and an expectation in the minds of potential franchisees.

Leverage Print, Radio and TV
Most of us think using media requires some crescendo event or large sums of money. While true in some instances, there are many clever ways to utilize media to send the message without the corresponding costs.
 
If a franchise is a regionally- or nationally-known brand looking to expand, it can devise a communications strategy with favorable story writers to publish the “New News” about the brand. These can be planned as periodic informational articles that help create the buzz in advance of franchising efforts or work in tandem to attract and convert inquiries into actually producing franchisees.  
 
Similar strategies could be utilized to engage radio and TV.

Town Hall Meetings
Town hall meetings are face-to-face sessions with senior leadership set up in various regions to communicate the state of the business and direction with franchisees.  The difference between this forum and regional meetings is usually the presence of senior management providing greater authenticity to the event and its content.
 
This could be a good forum for senior leadership to excite and connect the current successes of the franchisees, tie it into an easily-understandable vision and future growth strategy of the company.

Personal Networks
Personal networks are essentially the contacts the franchise organization and its executive team have in their personal-business address books.  These are critical assets as these contacts can potentially transcend current business boundary paradigms. For example, one may have a friend who is an investment banker with some cash to invest. Someone else on the team may know a strong operator; others may know a developer.  If someone could find a way to put these people together, provide them the right message and help explore the possibility of working together, he could create a strong competitive advantage for the company.  The biggest risk here is the chemistry of the partners working with each other.  The more flexible environment created by the franchisor, the more chances of success under this model. The key is frequently communicating the expansion vision with others who may have an interest in becoming part of the expansion story, anticipating issues of these groups and finding solutions to make it happen.

Target franchisees of other brands
Franchisees of other brands in or outside of a company’s category could be additional targets for the franchising team. These are successful business-people who may be looking to diversify and expand their networks utilizing a portfolio of franchisees in their firms. Approaching them with a sound message and a clear vision could be very beneficial in expanding the franchisee base of the franchise system.

Chamber of Commerce events
These are targeted events that can help start the conversation about a brand expansion plan in new markets.  Some firms sponsor a Chamber of Commerce breakfast event to showcase their brand, depending on product give-away samples. It could be a good place to meet a number of leads and have a direct conversation about the brand and answer questions.

Professional Organizations
Active participation in national and regional chapters of organizations such as the International Franchise Association could be a good launching pad for brand messaging and growth opportunities.

Regardless of company size, a well-thought-out strategic growth plan is basic to any franchising conversation. But when a company also develops a clear communication plan with a target audience in mind, it provides the powerful advantage of focused messaging, to a targeted franchisee profile, and ultimately results into discovering the right franchising partner. 

Salman Siddiqui is director of development for Dunkin’ Brands, Inc.  He can be reached at 240-676-4766 or salman.siddiqui@dunkinbrands.com. 

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