How to Grow a Great Franchise

January 2009 Franchising World

Differentiate your franchise product, attract attention and secure sales to grow a great franchise.
By Morgan J. Arnold, Ph.D.

A franchise becomes great by having a lot of great franchisees, not just a lot of franchisees. A significant barrier in   becoming great is that most franchise companies do not market their franchise opportunity well. They do not recognize the critical differences between consumer and franchise sales marketing, allocate insufficient budgets, target quantity over quality, and therefore fail to distinguish themselves in a very competitive marketplace.

Treating franchise sales marketing as a discipline separate from consumer marketing (though integrated with it) is a central requirement in building a great franchise. Understanding the key differences between the franchise opportunity and the consumer-facing opportunity is a starting point.

Widgets vs. Widget Shops
What is a franchise company’s product? It is not a hamburger or a tax fulfillment service. The franchise company sells franchises–the “franchise product”–while it is the franchisees that sell the hamburgers and tax services–the “consumer product.”

Similar to marketing a consumer product, marketing a franchise opportunity should comprise of the same basic elements: identifying a target audience, developing brand positioning, and generally differentiating the franchise opportunity from its competition.

However, that’s where the similarities end.

Trendy Young Things vs. Savvy Business Operators
Since a franchise company’s product is so distinctly different from the product its franchisees offer their customers, that company’s customers are equally different. Indeed, in terms of demographics and other descriptors, the franchise sales target audience is about as different as conceivably possible from the consumer target audience.

In targeting a potential franchisee you are asking them to commit a lot of their money and time to, in part, help develop your organization. There is no doubt that to grow a great franchise, you need great franchisees, but there is no reason to believe that the person looking for a franchise business opportunity is the same as the one who just wants a quick meal. Yet much of the time, the person seeking a franchise business opportunity is targeted with the same branding, the same imagery, even the same messaging that is used for consumer marketing.

Why? Lack of resources. Lack of awareness. Lack of focus. Regardless of the reason, it sends a very poor message to the people who you are asking to help build your organization: that you don’t value them, that you are disorganized, that you don’t have the resources to compete adequately, that you are asking them to commit to you, but you have not committed to them.

If you don’t target the right audience, you may grow a big franchise, but it will not be a great franchise.

Widgets-R-Us vs. etrade.com
If you sell widgets, your competition probably also sells widgets. If you sell widget franchises however, your competition may have nothing to do with widgets. When you sell franchises, you are competing with all other franchise opportunities out there and not necessarily with those which sell the same consumer product. In a broader sense, you are competing with anything that may lure potential investors away from investing in your franchise. The   franchise opportunity competition could be another franchise which has roughly the same franchisee financial requirements, or is targeting the same area of the country.

Since the competition for franchise sales is not necessarily the same as your consumer competition, it is all the more important to identify who the competition really is: is it other franchises with the same consumer-facing product, or is it other franchises with similar franchisee financial requirements? Is it a strong real   estate market? Identifying these key elements will ultimately allow you to clearly differentiate yourself and speak directly to the people you want: highquality franchisees.

A Clown Suit vs. A Business Suit
When you have a specialized product to sell, with a sophisticated target audience, in a highly-competitive market, it makes sense that you need to develop great marketing. And great marketing starts with great branding.

Branding is about conveying a meaning wrapped in a feeling; it is about manifesting an image in people’s minds that goes beyond a mere reading of the information; it is about striking a pose. Good branding helps to give, not only the data required to make a decision, but the intangible sense that the product is right. Often the strength of the consumer brand may draw potential franchisees in, but it is the franchise opportunity brand that will make the sale to the right person.

When a franchise opportunity is wellbranded, people can clearly identify what sets that specific opportunity apart from the rest because it speaks to the right market in a differentiated way. For a potential franchisee searching for the right franchise opportunity, good branding can cut through the noise and clutter of other opportunities and deliver a clear and appealing understanding of what is on offer.

A well-leveraged brand is not only perceived as more valuable, it is more valuable. In the consumer arena, good brand value often results in customer loyalty and affects the recruitment and   retention of talented employees. So too with franchise sales, a well-branded opportunity is going to attract the right types of franchisees. Franchisees with an affinity and connection with the franchise opportunity are far more likely to be in it for the long haul, sustaining and growing the business over time. So, good franchise opportunity branding can help with the quantity of sales leads, but far more than that, it is critical for the quality of those leads.

Shiny Shoes vs. A Shiny Bank Account
"Footy,” the rambunctious centipede, mascot for your multi-billion dollar shoe shining concept, may be great at selling shoe shines, but how good is he at getting millionaire businesspeople to understand that they can make a lot of money in the shoe shine business?

A franchise company should control their brand image, and it should try to make it correlate with, or evoke, the key selling points of the product it represents. Key selling points may represent the best things about the product, but more importantly they represent the aspects of the product that are most   useful in selling it to the target audience.

And the key selling points for a franchise opportunity are clearly going to be very different from those for a consumer product. Indeed, it is possible to recognize broad categories for these key selling points that apply generally to franchise opportunities. These points can be elaborated upon and customized for any specific franchise.

Grow a Great Franchise
Franchise sales marketing is the disciplined application of marketing techniques to the sale of franchises, an area of business that has been traditionally under-served despite representing one of the most critical challenges for a franchise company.
With franchise sales marketing you can differentiate your franchise product, attract the attention of your audience and secure sales to the quality franchisees that will matter most in growing a great franchise, not just a big franchise.

Morgan J. Arnold, Ph.D. is founder and CEO of Sprokkit. He can be reached at morgan@sprokkit.com or 213-626-2076.