Franchise Sales Strategy – What Actually Matters?

Here at Lead PPC, we help with both franchise marketing and franchise sales.  As of the writing of this article, we do ~85 franchise brands on the Google Ads / Meta Ads franchise development lead generation side of things.  And then on the franchise sales / franchise sales strategy side of things, we do <10 brands there.

Between the two (franchise marketing and franchise sales), there’s a heck of a lot more money in franchise sales than there is in franchise marketing.  Why?  Because franchise sales is where the money is.

For instance, on the PPC franchise marketing side of things, we typically charge somewhere between $750-$1,500 / mo. for a management fee.  But, when you get into implementing your franchise sales strategy and actually selling franchises, things get quite dramatically more expensive.  Baseline management fees start at about $5,000 / mo. and about 40% of your franchise fee.  Many FSOs within the industry charge $7,500-$20,000 / mo. for a management fee, 50% for the franchise fee, and some even charge 1% of the gross revenue in perpetuity from the deals sold.  Long story short, the money is in franchise sales.  But, the brand volume is in franchise marketing.

Let’s talk franchise sales strategy.

Where are the deals in franchise sales?  There are really a few major honey pots that drive deals:

1. Organic Leads – The best leads you can get are typically the organic leads of people coming to your website and requesting info on becoming a franchisee.  This is also the hardest to grow as SEO in the franchising space is brutal and there’s not usually a ton of volume there.  You’re more likely to grow by word of mouth and by having more and more franchised units.  So, it’s a bit of a chicken and the egg problem.
2. PPC Leads – Driving leads from Google Ads and Meta ads is a must.  It’s scalable and affordable.  And usually an ad budget of $1,500-$5,000 / mo. can make all the difference in the world for your brand and controlling your own franchise sales destiny.
3. Franchise Broker Networks – If you don’t have 2-4+ franchise broker networks out there selling your brand, you should.  Yes, it’s going to cost you ~50% of your franchise fee.  So, couple that with another 30% for an FSO, and there’s not a ton of profit on the table for the initial franchise fee.  But, if you’re looking to grow, an FSO + Broker Network combo can be really effective.
4. Franchise Portals – Most franchise portals are trash and a waste of time these days.  However, we do hear good things about Franchise Direct and Biz Buy Sell.  So having some of that in the mix can be a good thing.

You’ll notice that I didn’t include trade shows in this list.  It’s not that they don’t or can’t work.  It’s that it can be a giant waste of time, hard to consistently produce new franchisees, and is a great way to sacrifice what you should be doing on the digital side of things for something that used to work really well but doesn’t anymore.  Trade shows to me are basically the yellow pages of franchise marketing strategies.

Creating a well-defined franchise sales strategy is critical for the growth and sustainability of any franchise business. It provides a roadmap for the franchisor to attract and qualify potential franchisees who align with the brand’s values and business model. A strategic approach to franchise sales ensures that you are not only expanding your business, but also maintaining the quality and consistency that customers expect from your brand, regardless of location. This is crucial since each new franchisee becomes an ambassador of your reputation, and their success reflects directly on the overall brand. Thus, a defined sales strategy helps in achieving a selective yet effective franchising expansion that contributes to long-term profitability and brand integrity.

Introduction to Franchise Sales Strategy

Franchising has become a popular and successful business model, allowing companies to expand their presence and reach customers in new markets without significant investments. However, with the increasing competition in the franchise industry, it is crucial for franchisors to have a well-defined sales strategy to attract and qualify potential franchisees.

A franchise sales strategy serves as a roadmap for the franchisor to target and engage with potential franchisees who align with their brand’s values and business model. It outlines the steps and processes involved in identifying, attracting, and ultimately closing franchise deals. A strategic approach to franchise sales not only ensures the growth of the business but also maintains the quality and consistency that customers expect from the brand.

Importance of a Franchise Sales Strategy

Having a well-defined franchise sales strategy is crucial for the long-term success and sustainability of any franchise business. It helps in achieving a selective yet effective franchising expansion that contributes to long-term profitability and brand integrity.

A defined sales strategy also ensures that only qualified and capable individuals become franchisees, which is essential for maintaining the reputation and standards of the brand. Each new franchisee becomes an ambassador of the brand and their success reflects directly on the overall brand image.

Components of a Franchise Sales Strategy

A successful franchise sales strategy comprises several key components that work together to attract potential franchisees and guide them through the franchising process.

Target Market Analysis

The first step in developing a franchise sales strategy is identifying the target market for the franchise. This involves analyzing factors such as demographics, consumer behavior, and competition in the desired location.

Lead Generation

A crucial component of a franchise sales strategy is lead generation – identifying potential leads through various marketing channels such as advertising, trade shows, and referrals.

Qualifying Leads

Not all leads are suitable candidates for becoming franchisees. A well-defined sales strategy includes a process for qualifying leads based on criteria such as financial stability, business experience, and alignment with the brand’s values and goals.

Franchise Disclosure Document (FDD)

The FDD is a legal document that provides potential franchisees with detailed information about the franchisor and their business model. It is an essential component of the franchise sales process, as it helps in building trust and transparency with potential franchisees.

Sales Process

The sales process outlines the steps involved in closing a franchise deal, including presenting the FDD, conducting discovery days, and negotiating terms. A well-defined sales process ensures consistency and efficiency in closing deals.

Final Thoughts

A well-defined franchise sales strategy is critical for the growth and sustainability of any franchise business. It not only helps in expanding the brand’s presence but also ensures that each new franchisee represents the brand’s values and maintains its reputation. By understanding the components of a successful sales strategy, franchisors can attract and qualify potential franchisees who will contribute to the long-term success of their business. So, it is essential for any franchisor to invest time and resources in developing a comprehensive franchise sales strategy. So, it is essential for any franchisor to invest time and resources in developing a comprehensive franchise sales strategy. Through a strategic approach to franchise sales, franchisors can achieve their expansion goals while maintaining the integrity and quality of their brand.

 

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If you would like to speak with us about potentially having us help drive quality franchise leads and sales for your franchise please fill out our Contact Us form.

We are a boutique franchise marketing agency via PPC (Google Ads + Meta Ads) that also provides franchise sales services..