October 2009 Franchising World

Multiple franchise options offer unlimited potential for both franchisors and their franchisees.
 
By Christopher M. Grandpre 

Researchers have forecasted significant growth in the outdoor living and at-home leisure categories due to both the ongoing “cocooning” effect Americans have adapted (relaxing or vacationing within the confines of their homes with friends and family) and the soft state of the current economy.
  
The strategy at Outdoor Living   Brands is to leverage these attractive industry trends to grow our current brands while creating multi-branded business opportunities for current and future franchisees. This is our version of multi-unit franchising. Adding a multi-branded strategy has compelling benefits both to the franchisees, as well as for the franchisor. Multi-branded franchise operations, especially in related businesses with similar client demographics and profiles, allow franchisees to cross-market and cross-promote each business and brand to their existing client bases, significantly lowering the cost of new client acquisition. 
  
From the franchisor perspective, there are numerous benefits of operating multiple related franchise businesses in the portfolio. The franchisor’s infrastructure–such as its senior management team, technology platform, franchise recruiting team, and its branding and marketing expertise–can be easily leveraged across multiple brands. For example, with multiple brands that have different operational complexities, required skill sets and investment levels, the franchise sales process can be far more consultative in nature compared to when a franchisor has only one brand to offer to a candidate.
  
Using a consultative selling process allows franchise recruiters to more easily bond with candidates to determine if one or more of the franchise concepts can help them to accomplish their personal, financial and business goals that caused them to evaluate investing in a franchise. In addition, this enhanced relationship developed during the consultative sales process allows the franchisor to conduct a more thorough and honest assessment to determine if the candidate is the right fit for its culture, brand and system. 
  
In addition, if, like us, the franchisor relies on strong partnerships with a number of the franchise referral networks to help source and identify qualified candidates in its franchise   recruiting efforts, then a multi-unit, multi-brand strategy can help accelerate its development efforts. For example, as franchise brokers develop confidence in the quality of the franchisor’s franchise recruiting sales process with one brand, this confidence can quickly be extended across multiple brands allowing high-quality lead flow to accelerate quickly.
  
However, even more compelling, is the ability to crosspollinate best practices from one franchise brands into the other franchise systems.  
  
Quick Ramp-up 
Brand systemization benefits enable franchisees to quickly ramp-up new units. We are always in search of best practices to share across the franchise systems. For example, our in-house branding and marketing team teaches and promotes our seven-step marketing process in a way that is easy to understand for new franchisees investing in one of our outdoor living concepts.
  
Key attributes of enabling their targeted new business prospects to get to know, like, trust and try them are showcased in our marketing system and catalog of marketing materials–a robust collection of proven branding, marketing and lead generation tools. Included in the marketing system are ads, brochures, door hangers, direct mailers, white papers, press releases and lots of compelling communications to help new franchisees hit the ground running quickly after start-up.
  
There is consistency across the brands. The marketing system for our outdoor living spaces design-and-build franchise, Archadeck, looks very similar from a creative and executional vantage point to our exterior lighting franchise, Outdoor Lighting Perspectives. Likewise, the marketing system of Outdoor Lighting Perspectives looks and feels very similar to that of our mosquito and outdoor pest control franchise, Mosquito Squad.
  
So, when a franchise candidate explores multiple concepts initially or when a current operator is considering adding another one of our brands to their operation, they see how all three marketing systems have the same “rhythm and feel.” It causes them to often think “Oh, I get it … the brands are different, but the marketing and selling systems are quite similar … and they’re all focused on a similar client demo-graphic of individuals seeking to enjoy the outdoor living lifestyle!”
  
This strategic systematization of our marketing approach is a great way to encourage the purchase of multiple brands within a territory by the same franchise partner.
  
Consistency across the brands also enables the multi-unit, multi-brand franchisee to more quickly ramp-up the operations of the new unit since some aspects of the business model and system will already be familiar and comfortable.  
  
Less Uncertainty
For the franchisee and franchisor, adding a second unit through the second brand offers several key advantages. First, the parties already know each other. We all know that relationships are crucial in franchising. Existing franchisees and the franchisor have already established the working relationship and trust which make expansion smoother and less risky (for both parties) than starting from scratch in another system or with an unknown franchise candidate. Also, since   the acquisition cost for the franchisor of a new unit is less when an existing franchisees adds a second brand, incentives in the form of reduced initial franchisee fees can be offered to multi-unit, multi-brand operators allowing both franchisee and franchisor to benefit financially.
  
Cross-Selling Benefits Franchisees 
For multi-branded franchisees, there is a great opportunity to build multiple complementary revenue streams through the combined client reach and frequency of contact. Once a franchisee has secured the loyalty of a client, it is much easier and more cost-effective to sell an existing client an additional product or service (or upgrade) than it is to persuade and convert a brand new prospect.
  
With multiple brands and multiple units, especially in related industry sectors, the combination can be compelling and convenient for both the franchisees and their clients. Also, this crossselling to a historical client base allows the multi-unit, multi-branded franchisee to rapidly scale his business and achieve profitability of the operations of the new brand faster than compared to single-unit   operators.
  
Offers Client Benefits as Well 
Think about it from the consumer perspective, excellent client service in the home improvement and home services categories is rare. Can you remember the last time a home services provider or contractor promptly returned your inquiry call? Or, how about that scheduled service call you patiently waited for (where you took the day off from work to be home), when no one ever showed at all?
  
So, when a client receives unparalleled, personalized   service through one business unit of a multi-branded franchise business, it is highly likely that this same client will be very receptive to purchasing additional products or services from that same franchisee. The confidence earned from the operations of one business unit will be transferred to the second unit.  
  
It Works 
For example, a franchisee who operates both Mosquito Squad and Outdoor Lighting Perspectives recently called me to share a great story. He was in the field serving his Mosquito Squad clients. In the span of just a couple of days, two separate clients noticed from his co-branded vehicle that he was also in the outdoor lighting business. He wound up selling approximately $10,000 in outdoor lighting to these two clients. The fact that he already had a relationship with them and they already trusted him and his attention to client service was the key to these additional sales. There was no incremental cost to land these two new lighting clients–this means he didn’t need to invest $375-$400 per client, which is the typical cost to acquire a new customer relationship in this business.   
  
To encourage this cross-selling of multiple franchise products, creative franchisees employ a variety of cost-effective tactics such as co-branded direct mail and cross-marketing pieces in invoices. Also, joint newsletters, promotional gifting of the services to thank clients of one brand and introduce them to the other brand, and loyalty or rewards programs can be used to cross-promote the businesses. The franchisor can assist these efforts with the development of co-branded marketing and advertising material as well as the systemization of these tactics in the training and franchise support efforts. 
  
While the multi-brand, multi-unit approach is a different spin on traditional multi-unit franchising, it can be an extremely effective strategy and costeffective tactic for both the franchisee and franchisor to pursue increased growth.  

Christopher M. Grandpre is president and CEO of Outdoor Living Brands, a company franchising leading brands within the outdoor living market. He can be reached at 804-353-6999 ext. 100 or  cgrandpre@outdoorlivingbrands.com  .