Franchise Update Magazine Issue II, 2017 - Page 82

GROWING YOUR SYSTEM It’s closing time Facing the Brutal Facts Franchise development, we have a problem! BY ART COLEY I subscribe to the Stockdale Paradox. Jim Collins made it famous in his best- selling book Good to Great. Here it is: “You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.” In development, we are great with the “faith” and “prevail in the end” parts of the quote. However, the “confront the most brutal facts of your current real- ity” part is another story. The proof is in the data collected each year in Franchise Update’s AFDR regarding lead genera- tion, signings, mystery shops, conver- sion rates, and other aspects of franchise development. I think we can do better. That’s why I’m honored Therese Thilgen and Fran- chise Update magazine have asked me to join the team with a regular column fo- cusing on the “brutal facts” and “current reality” of franchise development—and solutions for the challenges we face. Let’s start with a basic outline of the process and results we want: 1. Targeted lead generation of quali- fied candidates. 2. An efficient and sustainable discov- ery process. 3. Secure targeted number of franchise agreements. 4. Successfully on-board new fran- chisees. 5. Repeat steps 1–4. If these five steps are what “prevail in the end” looks like, we know that for most brands this is not the “current real- ity.” There is a development challenge for many brands and it’s chronic. It’s systemic. It’s deep and not easy to face or solve. Yes, we have a problem, but one that is worth addressing and conquering because your brand’s future depends on it. So, what is it we face? Here are some areas to consider: • Not understanding true develop- 80 Franchiseupdate ISS U E II, 2 0 1 7 ment. Development is the timeline from planning to lead generation through at least the first 12 months of new franchi- see on-boarding. • Wrong metrics. Development is more than the number of leads and cost per lead. Through this column, we are going to look at the critical metrics of development and how you can track and measure what’s really happening, and even forecast the upcoming months. • Lead generation. I’m going to show you how to get it right, including how to efficiently and effectively implement a “multi-channel cross-media integrated marketing strategy.” (I know, it sounds fancy but I’ll explain why it’s critical, what you need, and a simple way to implement it.) • Initial fees approach is old school. Today’s quality candidates must understand these fees and why they are paying them. • Recruitment as a profit center. “How much money can we make from ‘selling’ franchises?” is the wrong ques- tion. Focus should be on the unit econom- ics and royalty created with a successful new franchisee. • Many best practices are failed practices. Lots of preaching and regur- gitation of practices that do not work or are outdated. We must be willing to chal- lenge our way of thinking… and that’s what I pledge to do through this column. • All the “reward money” is at the signing. Big fees to brokers, commis- sions, celebrations, etc. all happen around signings, while the franchisee is terrified about starting a