W
elcome to the final installment of “Anatomy
of a Franchise StartUp.” EarthFruits Yogurt, which began its journey in mid2010, now has one and a half years
under its belt. Over the course of this
series, I’ve done my best to give you
a transparent glimpse into our new
system. In this last article, you might
begin to draw your own conclusion as
to whether or not we have any chance
of achieving our lofty vision of becoming the “Starbucks of the Frozen
Yogurt Industry.”
Franchising sounds great:
you go first
Few of us would disagree that franchise
sales in today’s economy is challenging
at best. But how much more so for a
new and emerging brand that few have
even heard of? I believe the economy
is definitely creating challenges for
those looking for franchise financing,
but it also has created unprecedented
levels of interest for those looking to
break their reliance on the job market by being in business for oneself.
I believe that the term “franchise
sales” is a misnomer. You can’t “own”
the brand. In my estimation, what we
are doing is helping to match our brand
vision with the goals and aspirations
of franchise prospects. We can create the environment, but it’s typically
your existing franchisees who “make
the sale” through their goodwill and
positive validations. This can be extremely challenging when you have
no (or a limited) proven history, no
brand awareness, limited press, and
no validators. Now, allow me to turn
convention on its ear.
A contrarian’s point of view
Experience is a great teacher, but there
are times you must blaze your own
trail. Many of my seasoned franchise
friends have offered advice, including: “Don’t franchise abroad until
you have a significant North American presence”; “You’ll need to rely on
lead generation websites”; “Don’t use
brokers”; and “You’ll need at least 100
leads a month to generate one sale.”
We politely decided that what got
you there yesterday may not get you
there tomorrow.
A few steps were critical, starting
with our investment in a great-looking
and informative website, complete
with a “brand video” (which we created and executed on our own), and a
The economy
is definitely
creating
challenges for
those looking
for franchise
financing,
but it also
has created
unprecedented
levels of
interest for
those looking
to break their
reliance on
the job market
by being in
business for
oneself.
plethora of multimedia with pictures
and videos of great-looking product,
videos of a store vibrant with happy
customers and the surrogate representations that spoke to a business that,
for all intents and purposes, appears
to have been there for years.
This was critical in winning the
support of brokers, who could see
we had a going business and a clearly
differentiated brand. Now, our broker strategy won’t work for all; we
were fortunate to have a previous and
proven reputation of being straight
shooters and closers. We, every bit as
much as our concept, were part of the
initial appeal. Not all franchise brokers invited us in at first. Two firms
wanted us to have several franchisees
open and operational for at least six
months before they would invite us
into their portfolio. The brave brokers
who opened their hearts to us initially
have been amply rewarded. We made
our decision to favor the broker approach, following a decision to not
overspend on portals to less-than-likely
stellar results. We concluded that, as
a start-up, we didn’t need a lot of tire
kickers—we needed the highest level
of pre-qualified prospects possible.
This approach has paid dividends. Now
that we are finding our mojo, it’s time
to diversify by employing a pay-perclick and microsite strategy that we
are highly optimistic about to round
out our franchise marketing strategy.
Validating in a new
franchise system
One of our biggest challenges as a
new system was answering questions
related to earnings potential. We had
but one corporate location, and every
candidate invariably wanted to know
how much they could make, or at the
very least information about the margins. Without any franchisees initially,
we purchased an industry report from
FRANdata (also available from organizations such as Franchise Help and
Franchiseupdate I ssue I , 2012
19