How to Franchise in a Slow Economy
- 1). Support your current franchisees well. If the economy is slow and you're struggling as a franchiser it is quite likely that your franchisees are struggling as well. This is the perfect time to go out of your way to add additional marketing and support tools for them. When potential new franchisees call your current franchises, it really helps if they're singing your praises for supporting them during tough times.
- 2). Build an item 19 in your Franchise Disclosure Document. Every franchiser is required by the Federal Trade Commission to have a franchise disclosure document given to every franchise buying prospect. These documents contain 23 different items that must be disclosed to potential buyers. Item 19 of an FDD is where franchisers can make a financial performance representation or earnings claim. This earnings claim is the only legal way franchisers can inform potential franchise buyers of the economic-performance potential of a given franchise system. Adding an item 19 to your FDD will really help in your franchise sales efforts.
- 3). Contract and educate a network of franchise brokers. Franchise brokers and broker networks are great resources for finding new franchisees. Franchise brokers often want a fee of 40 to 60 percent of the initial franchise fee you charge new franchisees, but it is often money well spent. Franchise brokers can bring great prospects to your sales team; just be sure to educate them well on your concept and what you're looking for in potential franchisees.
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