These are questions that franchisors submitted as part of the WednesdayWise Webinar on Franchise Development but that were not answered due to time constraints.
What is the common denominator for the quick growth of these brick and mortar brands. Do you separate by size of square footage needed? (Asked by a Beauty Salon Franchise)
Many factors determine fast growth. The three brands represent vastly different stories behind them — for one, a story of an influx of multi-unit owners, another is one of wild unrestricted growth and one of a quick shot of fame and a tapering off. Underlying all of them is the need for the organization to be able to support the complexities that are involved with super fast growth. To understand how they did it in detail, you would need to dive deeper into their start-up metrics. We can help you with that.
What are your annual LG(Lead Gen) budgets? Budgeted CPS (Cost Per Sale)? (From a Bakery Brand)
According to last year’s Franchise Update report lead generation budgets was at $253 (just marketing) and cost per sale was at – $11,639 with a closing ratio (leads to sales) of 1.8% (down from 3.5 % in 2022, 3.0% in 2021). Reduce cost per lead by going after better targeted, high quality leads. More information can be found here.
I’m curious to learn from your panel do all of them have financial backing and/or full ownership via private equity and/or investment organizations? (Automotive Service Brand)
The Joint is a publicly traded company and Unleashed Brands is a portfolio company with PE investors. If you want to learn more about the correlation between PE, financing and growth we have this information in our database.
I want to shift my focus to multi-unit franchisees, how do I know who to go after? (From a Service Brand)
Firstly, understand that these MUO are sophisticated and motivated buyers- you have to come armed with knowledge and be prepared for every interaction with these MUOs. First identify your growth strategy. There are more than 42,000 MUOs in the United States — do you know your sweet spot? You can find your sweet spot by gaining insight into your own internal franchisee-base- like knowing if they are multi-brand owners? If you do not have enough franchisees to gather insight, studying your competitors and finding out the make-up of their franchisee base is also a good place to start.
Apologize if you addressed this but I was wondering given your experience with multi-unit/multi-brand franchisees what size would you say a franchisor needs to be before these candidates strongly consider them? (Question from a QSR Brand)
There is really no specific size, it depends on the brand and the franchisee. Do you have proof of concept and a good brand story? Some Multi-unit franchisees only invest in national brands, while others might be more open to emerging brands, you will need the background intel to distinguish these franchisees from one another. Our franchisee playbooks are able to help discern franchisee investment preferences.
So what advice can you give if your FDD has no item 19 since the model presented is new. (from a Medical Retail Franchise)
This is often the case especially for emerging brands and is a common challenge. In the absence of an Item 19, sell the brand story and talk about leadership and culture, especially when there is deep industry experience among leadership. Finally, make the case for:
- Demand for this concept in the market (industry research like what we did for the Pickleball industry – download here, third party studies etc.) especially for relatively new franchise industries
- Efficient and cost-effective operations (high margins)
- Potential for repeat business
What would your advice for a concept that has pretty high financial qualifications as well as investment costs higher than the average in the industry? (FDD ranges up to $8M for ground up – we did add conversions investments to the latest FDD) (from a Restaurant Brand)
You need more financially qualified candidates and look for brands with similar requirements. Target larger multi-unit franchisees who will have the financial assets and experience to successfully invest in the brand. It is important that the focus is on creating relationships, brands must be knowledgeable about the specific MUO before calling them, as James Franks from Unleashed mentioned — After determining your targets, learn how to reach them on a personal level through actionable insight.
We have a subscription to ZoomInfo, the contact information is crap where can we get good sources of information (From a supplier)
Big contact aggregators like Zoominfo or D&B do not have the time or focus on the franchise industry. As we all know, the number of individuals and complexities of their investments make it difficult to accurately identify franchisees, particularly multi-unit owners. FRANdata has a team of investigators who primarily researches these franchisees and their ownership portfolio.