Franchise Sales and the "Build a Better Mouse Trap" Myth
By William Hart

When you read the literature about starting a franchise, you commonly find sage advice concerning the pros and cons of franchising versus other growth strategies like business opportunity approaches, multiple chains or even simple licensing formats. However, there rarely exists information on one of the critical issues affecting the short and long-term success of the new venture, which is how is the franchise going to be marketed and sold to the interested entrepreneur.

No one will argue that it is critical to have the proper franchise agreements and compliance documents in order to be legal and protected. However, many new franchisors-and sometimes even those that have achieved some modicum of success-believe that they have accomplished the most important step in assuring their success once they have developed and filed their necessary documentation. Yet, they have not addressed the critical issue of how and where they will find prospects for their new business, let alone how they will cause the prospect to pick their franchise out of the hundreds that exist in the marketplace.

Why is that? Well, perhaps it is because many, if not most, new franchisors develop their franchise after they have run one or two successful stores or units. And, they think that to be the next McDonalds they simply have to get prospects to try their product or service to "know that it is the best." These new franchisors often say: "Oh, selling the product/service won't be hard, it is so good that once people see/use it, it will sell itself." They believe "build a better mouse trap and the world will beat a path to your door."

Unlike Kevin Costner in Field of Dreams, who was told that he must only "build it and they will come," today's franchising entrepreneur must give careful consideration to the selling or awarding of new franchises. The franchisor must acknowledge that he or she is now in the business of franchising and not solely in the ice cream or home cleaning business in which they started out. And, they must internalize two concepts

1. Everything starts with the sale of the franchise.
2. Growth in unit numbers is crucial to the individual growth of units.

Without growth in unit numbers, the franchise can never attain that critical size or mass that allows it to have clout in the marketplace. Ask yourself what you think of when you think of hamburgers, mufflers or printing? Quite often the answer given reflects the tremendous size and position that the franchise enjoys in the marketplace.

Size and clout means that there are sufficient numbers of franchisees to develop the brand awareness which is pivotal to the long-term success of the franchisor and the franchisees. The budding franchisor must answer the question of just what strategy will be employed to build their franchise numbers and over what time period will it be achieved. Thus, the plan to award franchises becomes an integral part of the overall business plan for the franchise.

The key issues that need to be addressed in building a strong marketing plan for franchise sales/awards should include:

1. How will the franchise be sold/awarded? What is the sales methodology? What are the material and technology requirements?
2. How will the franchise be priced and why?
3. What are the short and long term goals for franchise sales-by month, quarter, and year-and are they realistic?
4. What is the budget for franchise sales? What does the budget include-staff, materials, travel, etc.
5. What method of lead generation, i.e. advertising or recruitment, will be used and why?
6. What is the impact of franchise sales activity on the operating budget? On cash flow?
7. What is the impact of franchise sale/awards on the administrative staff? Can fulfillment requirements meet sales production?
8. Who will make the franchise sales?
9. What role will other staff have in franchise sales/awards?
10. What role, if any, will existing franchisees play in the sales process?

The franchisor that can build a franchise sales process based upon answering these questions will take a major step in ensuring the success of their franchise business. Their new franchises will not be awarded or sold on a laissez faire basis, but rather by a systematic, planned process that works to ensure the long term growth and success of their franchise business. "If you plan it, it can happen."