How to Attract the Ideal Franchisee
According to Statista, there were approximately 759,000 franchised establishments in 2018. As such, those interested in purchasing a franchise have a surplus of concepts to pick from – in every space and category imaginable. Just as candidates are in search of the right system that best suits their needs, franchisors know that partnering with qualified franchisees is a key ingredient in building a successful franchise concept. With so many franchised businesses out there, franchisors must break through the clutter in order to attract their ideal franchisee.
Someone’s first experience with your brand is just the first step of breaking through the clutter – and this rings true for customers as well as potential franchisees. Just as the saying “first impressions matter” when going on a first date, the same goes for your initial interaction with a potential franchisee. Prior to franchising your business, I recommend having the following items in in place:
- Have a creative, clean and easy to navigate website. This is important, as someone is not likely to invest in a concept that they are not proud to showcase to family, friends – and most importantly, customers!
- Your website should have a consumer-facing portion, as well as a franchise portal that includes pertinent information for potential franchisees. This portal should include information such as:
- Initial investment price range and what is needed financially to qualify
- Royalty fees – and whether they’re fixed or percentage based. On average, a majority of franchise models collect an average of 5-6 percent of gross sales volumeeach month. My company, NUTRISHOP™, prides itself on not collecting monthly or annual royalties from our franchisees, meaning their income is theirs to keep!
- Make note of whether you assist with financing – or if you can make connections to lenders
- Provide a breakdown of on-going franchisee support, including:
- Real Estate (selection, negotiations, build-out, etc.)
- Protected territory rights
- Initial and on-going training and support
- Marketing assistance
- DO NOT provide average revenue. While this seems like a valid question for a potential franchisee to ask, I don’t recommend publicizing this. There are many factors that play into this, such as: New franchise sales don’t often parallel an established franchisee and how knowledgeable, willing and driven an individual franchisee is.
- Maintain a consistent brand message across all channels, including website, social media, franchise locations, media placements, etc. Mixed information will not only put off potential franchisees – but consumers as well
- Participate in franchise trade shows! This is a great opportunity to meet with potential franchisees face-to-face
While this may seem like a lot of information, in my experience of offering NUTRISHOP franchises, it’s an excellent first step in attracting ideal, qualified leads. Making this information public allows those who are not serious about your system or who cannot meet your requirements to be weeded out. Only those who believe they are ready to take the next step will fill out the application.
That said, even with this abundance of information, there will still be applicants who do not fit your business’ ethos. On average, we receive close to 400 applications to become a NUTRISHOP franchisee on an annual basis. We pride ourselves on attracting and securing ideal franchisees through our detailed vetting process.
For NUTRISHOP and the nutritional and dietary supplement industry overall, an ideal franchise partner must have a genuine passion for health and fitness and want to help consumers achieve their health and fitness goals. This may seem obvious, but we receive applications on a regular basis from those who have limited or zero interest in our industry. This will not work. In order to be successful in our business, you must be able to spread the company’s mission of bringing awareness, knowledge and passion to the nutrition field. Our system isn’t one you can simply treat as a monetary investment – it’s one where you need to be educated in the space, paired with drive, determination and a relentless work ethic to make your location thrive.
Whatever your industry may be, I recommend identifying the founding principles to the business and not straying from these when deciphering whether someone is the right candidate. While it’s great to award franchises and see your business grow, if someone is not a direct extension of your company’s “North Star,” they are likely to fail. When a franchisor’s mission, goals and requirements are clear and unwavering, it’s easier to identify whether a potential franchisee’s interest will result in a successful and long-term partnership.
Bryon McLendon is the Founder of Nutrishop, Inc. He began opening nutrition stores in 1997. He was determined to build something special. He wanted to create a business model that would provide consumers a diverse selection of high-quality dietary and nutritional supplements offered at guaranteed low prices coupled with exceptional, individualized customer service. He founded Nutrishop, Inc. in 2003. Now, more than 15 years later, he is still helping others achieve their dream of owning their own successful retail nutrition business.