3 Ways Existing Franchisees are Key to Recruitment
Your franchisees are proof that your concept works. Of course, the more franchisees you have, the bigger the impression you make on entrepreneurs looking to invest. So, if you’re an emerging franchise, you will want to emphasize quality of franchisee experience over the number of franchisees. And since so many franchisors remain in the emerging category – almost 42 percent of the nation’s more than 3,400 franchisors have fewer than 10 units and more than 2,300 franchises have less than 50 units, according to FranData – it is advice worth heeding.
Franchise candidates doing their due diligence will inevitably speak with existing franchise owners, so it is important that your franchisees are your cheerleaders. Your current network of owners can talk up the brand and system potential, support and their relationship with the franchisor – making them critical to franchise development.
Everyone interested in buying a franchise wants to know how much they can potentially earn. It’s one of the first questions a franchise candidate is going to ask your existing franchisees. Therefore, it is imperative in the franchising industry that existing franchisees are seeing a healthy return on their investment. Before you begin franchising, make sure all your locations demonstrate strong unit economics and that franchisees will be profitable. After you have brought on franchisees and they are experiencing financial success, you can rest assured what they tell prospects will be positive affirmation that the investment is worthwhile.
In addition, strong franchisees in the beginning allow you to communicate a solid Item 19 Franchise Performance Representation, making attracting new franchisees much easier.
Attempting to add more franchisees before the existing ones are successful is one of the most common mistakes franchisors make. Your recruitment of more franchisees depends heavily on the success of current franchisees for business growth.
However, there’s more to running a franchise than money.
In franchising, getting a unit up and running is not something a franchisee should expect to do alone. Your existing franchisees will go a long way in reassuring the prospect they can rely on the franchisor for support at the start and throughout their franchise ownership. Make sure you have a strong support structure in place for your first and subsequent franchisees.
To do that, you need to consider what resources are available to support your franchisees in the areas of training, operations, marketing and more. When you begin, that resource may be you or current members of your team, so ensure that all have adequate time to contribute beyond their current role to help the franchisees. You will want to make sure you have enough support resources for expansion, so develop a plan for growth and allocate accordingly.
With the 2008 recession still fresh in people’s minds, franchise candidates will want to know who will help them get through any unforeseen economic hard times. Winmark brands saw an increase in the number of franchisee candidates during the recession in part because of the support it was providing to existing franchisees. With a strong support system in place, your existing franchisees will be able to attest that they are succeeding thanks to franchisor support.
Intertwined with support is the franchisor’s relationship with franchisees. For many potential franchisees who have left jobs to become entrepreneurs, they want to know they can get along with the franchisor and receive help when they ask for it. Trust is also a key issue for franchisees.
Trust begins with respect for franchisees. Franchisees feel respected when the franchisor listens to their ideas and concerns, helps remedy issues when asked to, and treats franchisees like equals. Strong unit economics, a healthy bottom line and a solid support system also go a long way to develop trust.
With 30 years of franchising experience and more than 800 franchise owners representing 1,200 locations for five brands, Winmark Franchise Partners can help you develop your recruitment strategy. As a franchise incubator, we have the knowledge and capital to get your brand on the right track. If you are interested in franchise growth, contact us here or at (844) 452-4600.