Founder of We FranchLeader of franchise group member gotechbusiness.com Business Council, 2023.
Legendary franchises were founded by people like you: visionary entrepreneurs with an irresistible concept who are eager to expand. The cornerstone of this expansion is in attracting great up-and-coming franchisees and setting them up for great success. Word of mouth spreads quickly and since affiliates often invest their savings in a franchise, they are likely to seek social proof from current operators.
Before you become an established franchisor with the resources to invest in corporate marketing, receive awards, and develop a franchisee recruiting process, you need to land your first franchisees. Here are six growth hacks I’ve gathered from my own industry experience and the playbooks of seasoned franchisors.
1. Market your franchise as a ticket to a prime location.
One of the main benefits of investing in an emerging franchise is the ability to own prime territories with significant purchasing power. Franchise territories are an asset in their own right and can provide franchisees with long-term exclusivity and protection in lucrative geographies. When selecting a strategic location, consider market trends, competition in the area, and infrastructure analysis to ensure the location is sustainable over the long term.
Established franchise giants like Crumbl Cookies, which has more than 600 locations in the US, may have saturated the most sought-after locations. If you’re a new franchisor, consider creating a more franchise-friendly version of an existing concept with a proven track record of success. This way, franchisees looking to get into a certain prime location will be more interested in considering your business. For example, Dirty Dough allows franchisees who couldn’t get their hands on a Crumbl store to offer a similar product in a particular location. In addition, Dirty Dough takes advantage of centralized biscuit productionenabling franchisees to open locations at a lower cost and with less labor.
2. Recruit franchisees from your customers.
Your customer base can be a gold mine for potential franchisees who are already passionate about your brand. A number of franchises have been opened by customers who like the experience of a favorite store and want to run their own branch. To take Javier Martinez, a Subway and WaBa Grill franchisee with 16 locations, which signed a multi-unit deal for 25 Randy’s Donuts stores in Los Angeles County. Martinez was not looking for a dessert franchise, but was impressed by the popularity of Randy’s Donuts in Torrance and saw opportunities to get it off the ground.
To take advantage of this resource, I recommend encouraging referrals and prospect scouting among your regular customers while creating opportunities for interested customers to contact you personally.
3. Target experienced franchisees with multiple locations.
Another way to accelerate the growth of your franchise is to focus on attracting seasoned multi-unit operators with proven industry success. To find multi-unit franchisees, attend industry events such as the Multi-Unit Franchising Conference. Connecting with established franchisees in adjacent concepts or joining seasoned franchise networks is another way to get acquainted with potential partners. For example, the Upstart Coffee franchise Seven Brew has expanded enormously thanks to the Introducing the founders of Jimmy Johns to its franchisees. It is worth noting, however, that Jimmy Liautaud, who was promised a share in Seven Brew in return for this assistance, is now suing Upstart Coffee (subscription required), a reminder of the importance of ensuring you have clear legal documentation before entering into such partnerships.
4. Incentivize early franchisees with rapid profitability.
Generous terms and reduced start-up costs are great ways to incentivize budding franchisees. Unlike established brands, emerging franchises are riskier for franchisees. Giving your franchisees a smoother start and faster wins can be crucial to getting them on your side. This may be like offering a split fee structure with reduced fees, allowing your franchisees to reinvest in key areas such as marketing and team development. Another example is that of Mosquito Joe’s, whose franchisees benefit from operational and technical support allowing them to focus on marketing and distinguish themselves through excellent customer service.
By creating a visually appealing, Instagram-friendly concept, franchisees can encourage customers to share their experiences and capture the attention of franchisees. An example of how a company can greatly benefit from social media exposure is Mr. Fries Man. Then rapper Nipsey Hussle posted a photo of their loaded fries on Instagram, the company saw a surge in followers, customers, and franchise requests
To encourage social media sharing for your concept, focus on creating visually stunning products and experiences, such as unique decor or photo-worthy backdrops. Provide your customers with a phenomenal experience and encourage them to share it, and you’re likely to see an increase in brand awareness.
6. Attract franchisees with a full tech stack.
By providing a technology-proven business model, franchisors can appeal to customers who value speed and convenience and give them the tools they need to succeed in today’s competitive marketplace. Tommy’s Express Wash is a good example of a franchise company that has embraced technology. Their membership app and member pay jobs make the laundry experience efficient and hassle-free, which not only improves customer satisfaction, but also provides valuable data to help franchisees optimize their operations.
In summary, treating your first franchisees as customers is critical to success. Make sure they excel by understanding their needs and coming up with an irresistible concept that appeals to them. Ultimately, while you focus on fostering franchisee success, they will help transform your emerging concept into an established brand. Keep in mind that your next franchisee might come across your concept through social media, a conversation with a friend, or an unforgettable experience as a customer interacting with your brand, so keep an eye out for new prospects.