You have created an attractive franchise package. You have thought of a support system for your franchisees. The only thing left is to put the process of selling franchises on stream. And for this it is necessary to decide where and how to look for franchisees, what information to open for them immediately, what information later, how to pay for the work of managers selling the franchise. The technology of successful franchising sales was discussed by the specialists of DeShop together with large franchisor chains at a round table during the BuyBrand exhibition, which took place on October 2-4 at the Expocentre
How to promote a franchise to the masses
According to Deloshop, the Internet works best when launching a franchise to attract customers. With the development of the franchisor, as a rule, more and more money from the marketing budget goes to participate in exhibitions. More than 40% of potential franchisees use brokers when choosing a franchise.
Naturally, the question immediately arises of how much information can be trusted on the World Wide Web.
According to Oksana Selyukh, Director of Sales, Rosinter Restaurants Franchising Office, the Internet is best suited for obtaining primary information, but further details are better to clarify by personal contact. Rosinter has two main channels for the emergence of new franchisees: about 20% are people who grew up inside Rosinter, a lot of clients appear after participating in regional exhibitions. Part of the partners comes from the hotel business.
Malkhaz Alsania from the “Planet of Hospitality” (Sbarro pizzeria network) said that the bulk comes through the Internet, exhibitions bring minimal benefit (in terms of concluding contracts, but you need to participate in them to maintain the image), and a network representative in one or another federal district.
The consultant of Deloshop company Denis Surkov added that effective ways of attracting partners include posting reviews of already working franchisees on the site (Surkov complained that companies rarely use this option), indicating the name of a specific person in contacts and working with the regional press.
He dwelled on the last question in more detail. According to Surkov, it is important not only to post information about your existence, it is important to show the dynamics of the company. Deloshop had experience promoting two franchises operating in the same industry and in one segment. The owner of one placed only image advertising in magazines - zero responses. The owner of another published diagrams, reports on profits and network growth - he found partners in the region very quickly. By the way, one of Surkov’s advice is to hire regional managers because they better understand the specifics of local business.
And then a big discussion was caused by the issue of the amount of information posted on the site. According to Denis Surkov, incomplete information about the site may push potential franchisees. And according to Oksana Selyukh, a good franchisee is someone who knocks, knows how to obtain the necessary information, perseverance is one of the qualities of a potentially effective franchisee. The other participants in the round table joined her opinion. As Alsania said, “we scare in advance that we have a penalty for each jump on the spot, that we have crazy contracts, it’s better to agree on the shore.”
Franchisors can be understood: all of them have a clear installation - not a single point should be closed. Therefore, they prefer to frighten at the start to look at the reaction of a person buying a franchise.
No less heated discussion raised the question of what should be the incentives for franchise sales managers. There were two options for the choice of participants: punishment for closing the point, bonus for the open point.
According to Malkhaz Alsania, neither of these is justified, because if the point closes, you can punish the manager as much as possible within the salary, but responsibility within the salary is not comparable with the brand value. Motivation for sales should not be - to evaluate the work of managers is based on opening indicators and KPI.
The most important question for beginners is how to sell the first franchise. The most reasonable answer is to show an example of your own outlets.
How to complicate your life, or 12 mistakes of franchisors
The topic of selling a franchise at BuyBrand continued with a study of the typical mistakes that franchisors make. A seminar on this topic was conducted by John Von Aiken and Michael Malloy, leading international experts in the field of franchising. According to them, mistakes occur at all stages, from the creation of the franchise concept to the support of the franchisee. The most surprising thing is that, as a rule, mistakes are made in seemingly elementary things that can be expected at the level of ordinary common sense: you cannot sell a franchise if you do not have your own successful experience in creating and replicating stores; it is impossible to give someone from the franchisee more favorable conditions than others; You cannot buy a franchise if you do not understand the essence of business processes.
The stories told by Aiken deserve to be business jokes:
- Hello, John. I want to transfer my business to a franchise.
- Well. How is your business structured?
- We have unrealistic conditions.
- Let's get a look.
“But we still do not have our own trading business.”
Many companies do not understand that selling a product and selling franchises are completely different things, and if you sell clothes and shoes well, it doesn’t mean at all that you can easily and easily sell franchises. More precisely, franchises will begin to be sold, but only then their partners will need to be supported, consulted - and at this stage completely different rights, obligations, relations arise. That is, starting to sell a franchise, the company takes responsibility for the development of its partners. Many do not understand this. They think that it is enough to convey the general concept, and then everything will go by itself.
The basis of franchising is duplication, not innovation. And this is one of the key contradictions, because entrepreneurs by their nature love risk, everyone wants to do it in a new way. In Russia, the situation is aggravated by the fact that the peculiarity of the Russian mentality is the reluctance to follow the rules. According to Aiken, a situation often arises when a nugget from the outback thinks: "I’ll bring a big brand to the city now and we will be happy." Leads - and changes at its discretion the layout, window dressing schedule, the timing of the assortment change. This leads to great difficulties both in terms of current management and in a strategic sense. If the franchisor does not control compliance with standards, then it loses its ability to protect the integrity of the brand (John Won Aiken's definition: franchising is a duplicated system of excellence). Mutual obligations should guarantee the invariability of all work performed in all corners of the world. An ill-considered approach to the choice of buyers leads to the fact that the brand becomes ill.
Another common mistake is the lack of a clear transfer of rights. The criterion is simple: if a student from a remote region cannot understand the document defining your rights and obligations as a franchisee, then they are too complicated, and this should alert you. In London MacDonalds, you can get the same thing as in Moscow, because they work on the system. When transferring rights, everything should be like in the army - there is no room for doubt: franchisors present a knowledge transfer system and a set of legal rights (by the way, it’s nice to check if a trademark is registered, because some companies start selling franchises before registering a trademark). Non-compliance with legal formalities should also alert you. The words "We will do it later" say a lot and not in favor of the franchisor.
Typical errors that appear already at the work stage include insufficient support for the franchisee (as John von Aiken says, franchising is primarily a relationship), a lack of ideas for developing a business, and an inability to solve commercial problems.
How to find a free niche
If you are just going to sell or buy a franchise, then it makes sense to pay attention to European trends in the development of franchising. Perhaps some ideas will seem interesting to you, and Russian niches will be free.
A comparative analysis of European franchising at BuyBrand was conducted by Rolf Gerhard Kirst, an expert at the German company Franchise Pool International.
He noted that in Russia, franchises are developing for the most part in two sectors - “fashion” and “retail”. For comparison, in France the most franchises are offered in the segments “food”, “fashion”, “rental of video equipment”, in Germany - the beauty industry, “technical service”, in Spain - “fashion”, “fast food”, in Greece - “ food ”,“ services ”.
Kirst noted that the food sector includes not only restaurant concepts, but also the organization of a business for installing vending machines, and the opening of supermarkets. On the whole, in his opinion, in the future, franchises of services will most actively develop in Europe.
9485 franchises are sold in Europe, and 3700 franchises in the USA and Canada. Franchising turnover in Europe is 233 billion euros, in the USA - $ 588 billion, in Canada - 392 billion euros.
By the way, according to the Deutscher Franchise-Verband Association, the entrepreneurial spirit is highest in Italy, Greece and Turkey - in these countries, most of all citizens have their own business.
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