The changing face of Australian franchise recruitment

James Young | Head of Franchise Sales | DC Strategy

The changing face of Australian franchise recruitment

There has never been a more interesting time to find, select and recruit quality franchisees. Although the franchising industry has seen a number of setbacks, it’s also seen a wealth of growth and positive changes. While the negative stories may be tarnishing certain brands, the industry as a whole is stronger for it.

We currently have a perfect storm of bad industry press, difficulty accessing funding, and increased competition, with more franchises than ever before fighting for a reduced pool of talent.

There are over 1200 active franchise systems in Australia, with many more ‘franchises’ that have not yet granted their first franchise – all out there competing for franchise partners.

Successful networks grow stronger. Simply put, you attract the franchisees you deserve. Franchise networks are finding it increasingly harder to attract suitable candidates, as there are currently fewer quality candidates considering the franchise market.

Potential franchisees are more educated and cautious when it comes to buying a business. As we are seeing in the real estate world, it is a buyers market at present, and thus franchisees come with more demands and higher expectations. Franchisees expect to be a priority, and they expect their money and their effort to provide a strong return on investment.

So how do you separate yourself from the pack and ensure that you are worthy of quality franchisees? How do you position yourself at the top of the pool and show that your business is ‘buyable’, i.e. profitable, proven and successful?

If you are new to franchising and currently launching your franchise offer, you need to make sure that you have invested in the right systems and structures, as well as partnering with the very best franchise consultants and lawyers. This is to ensure that your franchise offer will withstand the tests of competition; franchisees with a critical eye; funding difficulties; legal reviews; accountants testing the financial offer; and, not to mention the toughest hurdle of all, the ‘pub test’ – friends and family who have all heard a horror story with the word franchising attached to it.  

The first challenge for all franchisors is linked to finding ways to attract a potential franchisee. How do you generate a lead and then how do you continue to increase the standard of the leads your system is receiving?

The quick answer is that you need to invest in all of the touchpoints through which your franchise customer will come into contact with you. Do you look successful? Do you look like you are worth investing seven years and potentially hundreds of thousands of dollars in?

Your website (yes, you need a separate franchise website), franchise brochures, quality of messaging and franchise lead generation strategy need to look better and function more effectively than the competition’s in order to fight for the best franchisee lead. They need to instil trust and confidence in your brand, and your processes and systems to recruit franchisees will stand testimony to this.

If you were buying a car, you would base your decision on a number of factors including customer service, brand and price. Buying a franchise business is no different! Your offer needs to be competitive, you need to have a quality brand, and the process for purchasing the business should be hassle-free and inviting. Make sure that you have the necessary systems in place to ensure that every stage of the process is achievable. Be prepared and know what needs to be done. The key to a successful franchisee recruitment strategy is having everything you need to deliver in place. From financial details and legal documents to application forms, these should all be prepared before you start your franchise lead generation and recruitment journey.

You also need to invest in generating leads. Currently, our firm – which works with approximately 25 franchisors looking to grow across Australia and overseas – has an average investment per sale of approximately $4500. The industry average can be quoted at almost three times this amount. But these results are not just based on the look and feel of your franchise offer. What we do know is that you need to invest in marketing in order to generate leads and be able to take them through the recruitment process.

The key to successfully growing your business is that behind the sizzle and sales pack there is real substance and proven and profitable success. You need to be able to prove this statement and back it up with factual data.

Your training systems, your operations manuals, your franchisee support, your head office skills, industry knowledge and point of difference are valuable. These all make for saleable offer; they define your brand and make it a franchise opportunity worth investing in.

Your recruitment and franchise sales process then becomes just as critical to a successful lead generation and sales result. Consider who is representing your franchise to the market and ensure that they have enough knowledge and skills to do so. Remember that your existing company store’s performance and profitability all become critical to whether the leads you generate will move through the steps to joining your network. 

The positive to launching a new franchise brand is that you can shape your network, invest in your first franchisee’s satisfaction and success, and use this to attract even more quality candidates. You can also continue to improve your company locations and tighten your systems, so that you have an even more attractive offer for potential franchise partners.

If you are an existing franchise, it is time to review and reflect on your support model and franchise systems, and invest in your franchisees’ success. After all, your current pool of franchisees will be advocates for your brand, and you want them to share positive stories in order to grow your franchise network.

Potential franchisees – now more than ever – will be looking to your current system for insights into their future success. If there are skeletons in your cupboard, like many of the stories we have been hearing about from some of Australia's bigger franchise systems, they will be exposed and it will send quality applicants running. The Franchising Code of Conduct has put systems in place to protect franchisees, and the ACCC is ensuring that all the regulations are met and that franchisors are adhering to industry standards and the law set out by the Code.

Now is the time to invest and not to cut corners. Ensure that your franchise business is transparent and able to show its offer in a positive way. Put your best foot forward and ensure you have put everything prepared, thus setting your franchisees up for success. Never take your franchisees for granted and never forget that their success is your success.

So go out there and get the franchisees you deserve! They are out there, and they are crying out for honest, quality franchises run by quality people.

Good luck!

James Young has over 15 years' experience in the franchise industry. He has recruited franchisees for over 40 major franchise networks in Australia and internationally. James also assists franchisor clients in recruiting experienced operational and head office personnel. He is a licensed business broker who assists franchisors with exit strategies and negotiations and franchisees looking to sell their franchise business.

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