The changing world of franchisee recruitment

When dealing with enquiries from potential new franchisees, you've got to get with the times. Bill Pegram, director of marketing at The Franchising Centre, says updating your recruitment systems for the digital age is the key to expansion

The changing world of franchisee recruitment

The world has changed in many ways in recent years. One major change has, of course, been the growth of the internet, which itself has accelerated the speed of change in many areas of life. Interestingly, it has had a huge impact on franchisee recruitment – unfortunately, most UK franchisors are yet to respond to this change.

A few years ago, if you wanted to buy a new car or a TV, what did you do? You went to a car dealer or an electronics store and browsed. In short, you did your research in-store with the assistance of a helpful salesperson. What would you do today? You’d go online to do your research. Retailers have responded to this change in behaviour; for example car manufacturers allow you to spec your vehicle on their website so that you can see exactly what it will look like and how much it will cost. Electronics retailers give you full product descriptions and reviews to help with your assessment and enable you to buy online or honour their online offer in-store.

Either way, you will have done your research online and, even if you don’t buy online, by the time you walk through a retailer’s door you know exactly what you are looking for. The internet has conditioned our behaviour to do our research online regarding any major purchase. And it’s not just for consumer goods. Exactly the same principle applies in many areas of business, including how prospective franchisees do their research on which franchise to buy. And this is the very issue that most franchisors have failed to grasp.

The issue breaks down into two areas: firstly it’s important how franchisors make information available online to prospective franchisees. Secondly it’s how they respond to online enquiries. Many franchisors are starting to get to grips with the first issue and are making more and more information about their franchise available on their websites and by other means. But it’s in the second area that most fall short.

The internet has conditioned us to expect an instant response to any request we make. Whether it’s a general enquiry, the provision of relevant information about a product or service or the provision of website live-chat services, we expect an immediate response and to be able to engage with the business we are dealing with at any time of day.”

Now contrast this expectation with the way most franchisors respond to an enquiry or request for information. The vast majority still attempt to phone the prospect and, possibly, send out a hard copy prospectus. Aware of a growing disconnect in this area, we carried out our own research to find out exactly what is happening in the franchise recruitment market with an extensive mystery shopper exercise. The results of the research were shocking.”

Amazingly, 34% of franchisors who were mystery shopped did not even respond to a request for information. Of the remainder, 29% sent out a hard copy prospectus followed up by a phone call or e-mail, 51% sent out a PDF of their prospectus followed up by a phone call or further e-mail, 10% had no meaningful prospectus and the final 10% refused to give any information until after they had spoken to us on the phone.

However, the real shock was how quickly franchisors gave up trying to contact the enquirer. We found 35% only made one attempt to follow up on the enquiry and 18% only made two attempts before abandoning the candidate. So, all in all, 65% of the franchisors who were mystery shopped effectively abandoned the enquiry within about ten days or receiving it.

Compare this with our new internet-conditioned expectations to immediately engage with any company and receive information when and how we want it. You can see how wide the gap is between prospect expectation and franchisor response. In fact, looked at from the prospect’s point of view, carrying out research into which franchise to buy must be a pretty frustrating experience.”

As a part of our research, we took a long hard look at the US market and how franchisee recruitment is dealt with there. Not surprisingly it has been quicker to embrace change and US franchisors have adapted their franchisee marketing and recruitment systems accordingly. So the good news is this isn’t a problem without a solution. Yes, it requires an investment in terms of time and money to address the issue but many other sectors have done it and franchising will follow in due course.

We have demonstrated it is possible to produce a solution with our own franchise-enquiry handling process. It immediately engages the prospect, responds instantly to requests, feeds them the information they want, in the way that they want it, when they want it. It allows us to track prospects in real time, monitor their areas of interest and score them based on their level of activity, so that we can identify and concentrate on the hot prospects.

It has taken years of research and development for us to develop this kind of service but the game has changed and franchisors have to make this kind of investment to survive. And as franchisee recruitment is so fundamental to a successful business, franchisors are faced with a stark choice: adapt their recruitment systems to the internet age or get left behind by their competition.” /></p>
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<p><em>Bill Pegram is director of marketing at <a href=The Franchising Centre.

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