Analytics and the Franchise Awards Process

People often ask me how I ended up in franchising, and the truth is that I’m not exactly sure — I feel like I just landed here and stayed because I love it. Prior to Franchise Foundry, I co-founded two technology companies, both with an analytics emphasis. The first was Sharp Analytics. At Sharp, we did some really cool work for companies like Procter & Gamble, Princess Cruise Lines, Sprint, and other well known brands. These companies came to us because they wanted to understand their customers better in an effort to attract more “best customers.” For example, we did a customer segmentation and analysis for a very high end skin care line. We overlaid purchase behavior with demographic information to identify what the best and worst customers looked like. We used that information to create a marketing campaign aimed at finding new customers that looked like the very best existing customers. And of course, we measured the results.  It was rewarding work because it produced results.

So when I ended up in franchising, it was natural to look at the awarding franchises through the same lens. What do the best franchisees look like? Is there just one profile, or are there several franchisee profiles we should be looking at? What messages will those candidates respond to? Where are they? How do I find them? And how can we systematize and measure the process of discovering new candidates and awarding new franchises?

When we kick off development for a new brand at Franchise Foundry, we bring this type of thinking to the table. We start with what the ideal franchisee looks like, and identify demographics that will help us find people like them. We develop messaging specific to each targeted segment and roll out measurable marketing based on our plan. We rarely get it exactly right the first time, which is why we measure everything we do. We want to know what works and what doesn’t so we can fine tune the process.

The result is that year over year, we have awarded more franchises per generated lead than the national average by a wide margin. And we plan to continue to fine tune the process, improving our conversion rates this year by tracking our efforts closely and throwing out the stuff that isn’t working and spending more time on the stuff that does.

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Let’s Get Together

Let’s get together at the upcoming IFA Convention — either for business or to just meet and chat. Either way, let’s make the most of what is sure to be a great event.

I’m always excited to work with startup and emerging brands in franchising. The passion exhibited by founders is something that I truly cherish. To that end, my own passion is helping them achieve their goals.

With the IFA Convention just around the corner, I’m looking forward to sharing how Franchise Foundry can help franchisors:

  • Improve system sales and unit-economics
  • Strengthen franchisee relationships and communications
  • Increase franchise interest and actual franchise sales
  • Explore strategic or financial partnership for future opportunities

So, if you’re a franchisor with any of these objectives, we should meet in Vegas and explore the possibilities. I’m confident Franchise Foundry can help you achieve your goals. Of course, if you’d just like to get together for coffee or a drink and have a meaningful discussion about challenges franchisors are facing today, I certainly look forward to that as well. Or, maybe we should just exchange cards and agree to touch base after the convention? That works, too.

In any event, please contact me at psegreto@franchisefoundry.com. Let’s make the most of the IFA Convention experience… together!

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Handling the Onslaught of Leads

Spikes in lead flow always present an interesting challenge. Our client, Sub Zero Ice Cream and Yogurt, was on ABC’s Shark Tank last night and it generated a tremendous amount of interest in the Sub Zero franchise opportunity. Sub Zero has never had trouble generating interest in the franchise, but Shark Tank definitely increased the number of inquiries we received.

So how did we prepare to deal with the lead flow? Here are a couple things we did and they seem to be working. Hopefully they are useful to you if you find yourself in a similar situation:

  1. We use a great CRM. At Foundry, we use Salesforce.com. There are a number of CRMs that are exceptional and some of them are designed specifically for franchising. We use Salesforce.com because we are nerdy enough that we want to be able to completely customize our workflow and autoresponders. It has been a great tool for us because we know how to use it. It’s overkill for many development operations but it works for us.
  2. We use MailChimp. I am a huge fan of the simplicity of MailChimp for sending out and managing lists. We were able to directly import all of our new contacts into MailChimp and send out an email campaign to everyone who responded to the show.
  3. We setup a public calendar to simplify setting up phone calls. One of the hardest parts of lead qualification is trying to get people on the phone and arranging schedules. This posed an especially difficult problem for our team with the huge influx of leads. We wanted to spend more time on the phone and less time trying to arrange schedules. By posting our available times at Doodle.com and allowing interested parties to schedule a time with us, it greatly enhanced our ability to get people on the phone.
  4. We updated our electronic collateral to highlight the show. This provided relevant information to people who had seen the show and wanted to know more. We also updated the website and social media channels to make sure everything was in order so that people could explore and learn more before submitting an inquiry.

It’s a work in progress, but so far so good!

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What does the FranchisEssentials Partnership Mean?

We recently announced our partnership with FranchisEssentials in this press release. We are excited about the new direction we  are headed at Foundry and working with FranchisEssentials is key to our future success.

Paul Segreto is joining Franchise Foundry as our Chief Development Officer. He will be actively looking for new clients that we can help grow. Additionally, Paul brings his years of experience as both a franchisor and a franchisee. This will be a tremendous resource to the brands that we service at Foundry.

One of the first tasks he is undertaking is to strengthen our unit economics strategy for some of our clients. Successful franchisors recognize how important it is to have successful franchisees. Gone are the days that the franchisor can simply license the business model to a franchisee and wis them well. Today’s franchisors have to take an active role in training successful franchisees. At Foundry, we believe that the key to success as a franchisor is in the success of the franchisees.

We are thrilled to have Paul on the team and excited about the future of Foundry and FranchisEssentials.

More to come soon.

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How to Succeed as a New Franchise System

This is an article written for AllBusiness.com by Sara Wilson with Christian Faulconer contributing.

It was only last June that Allison O’Kelly started offering Mom Corps, a staffing company, as a franchise opportunity. However, in that brief time, O’Kelly has learned a lot. In the life of a franchise, every year is important. However, there’s nothing quite as crucial as that first year in setting the stage for what’s to come. So what’s the secret to making it past Year One as a new franchisor? We asked O’Kelly how she did it, and talked to franchising experts about what sets successful franchise systems apart.

1. Choose the Right Franchisees – and Give Them the Right Kind of Support

O’Kelly spent much of the first year talking to and listening to her franchisees. She then used the feedback that she received to fine-tune the franchise program so it would better meet their needs. “We wanted to use that period to refine our program, to ask ourselves, ‘What are we doing right? What are we doing wrong?’” says O’Kelly.

In Year One, O’Kelly also learned the importance of choosing the right franchisees to represent the brand. “Don’t bring candidates on [just] because they are willing to buy a franchise from you,” she says. “Only let the right franchisees in.”

O’Kelly was correct in prioritizing the needs of her franchisees. Christian Faulconer, CEO of Franchise Foundry, a franchise development firm, says that providing support to franchisees is crucial. “Your first franchisees are critical to the success of your system,” Faulconer says. “It is important to put support and communication mechanisms in place in order to ensure that your franchisees get the training and support they need and to make sure they have a way to voice concerns. This will improve the franchise system and will result in franchisee validation, which is critical to your ongoing sales efforts.”

Tim Howes, principal of Spyglass Strategies, a franchise consultancy practice, recommends developing an intranet system for optimal communication. “Possessing an intranet is a great start for younger franchise systems,” he says. “Keep in mind that when you’re new to franchising your concept and you’re training franchisees, there are bound to be gaps in the education process. As these franchisees ask questions, incorporate the answers into the next franchisee’s training.”

2. Tackle the Legal Side Early On

One of the key lessons that O’Kelly learned in the first year is that having a really good attorney on board is essential. This is one lesson many new franchisors don’t learn until it’s too late. “I think the most common mistake people make in their first year is they don’t get their disclosure document done right,” says Faulconer. “It is very common for us to see emerging franchisors that have legal messes to clean up because they sold franchises in states they weren’t registered in or they sold without a compliant disclosure document. These mistakes are time-consuming and expensive to fix, and in some cases they can kill the system.”

In addition to modifying the franchise program in order to better support her franchisees, O’Kelly also modified the franchise agreement, particularly around royalty and termination structure. “We realized that there were a few things in our franchise agreement that we would change,” she says. “We did our annual update and provided our current franchisees the opportunity to add an amendment to their current agreements.”

3. Take the Time to Create Lasting Systems

Systems are the main determinants of the life expectancy of a franchise. While some systems can’t be established until the franchise is up and running so that the kinks can get worked out, other systems are fundamental from the beginning. “One of the keys to a successful franchise is a proven and profitable system,” says Faulconer. “Some companies try to franchise before they have built a system that works. The most successful franchise systems have a repeatable business with a track record of success before they sell their first franchise.”

Often, in order to create the best systems, additional skills or talent needs to be brought on board. Franchisors need to be aware of this and take the necessary measures to improve the health of the franchise. “Many year-two systems try to juggle [running] corporate locations, serving existing franchisees, and recruiting new franchisees,” says Howes. “Some systems aren’t willing to invest early on in management because of cash constraints. Big mistake.”

Franchisors also need to remove their ego and act in the best interest of the franchise and its franchisees. “[One of the] most common mistakes is entrepreneurs aren’t willing to change their system for emotional reasons,” says Faulconer. “It helps to be very analytical about your business, its strengths, and its weaknesses. You should be willing to adapt intelligently to make the system better.”

There’s one thing all major franchises like McDonald’s, Dunkin’ Donuts, and Subway have in common. They all survived Year One, and they did so by creating a franchise system that would continue to endure even in a changing world. By building a solid foundation and taking the time to focus on the details and the success of your future franchisees, you can ensure your Year One is just the first of many years to come.

 

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