How to market a franchise
Date: 15/Jan/2012
It has been said that in a a new business nothing happens until a sale is made. In franchising like in most industries, this statement is painfully acurate.
Most people in retail have to keep an eye on turnover at the shop level. The franchisor has the responsibility to ensure a constant supply of customers, as a number of failing franchises can very quickly reflect poorly on the entore chain.
In most cases the franchise network will not make a profit until 3-4 franchised units are operating. The first franchisees in a system will not realise the benefits of group advertising, group purchasing power or trademark recognition until the number of franchisees in the system grows. Marketing dollars that 1 franchisee cannot afford will still pay off in many cases for the franchisor once he can sell a few licences to other franchise operators.
As with other aspects of a franchise expansion, the new franchisor will likely be very inexperienced in franchise marketing. Questions arise such as: Where does one find prospective franchisees? How can prospective franchisees be attracted to buy a particular franchise? What information should be given to interested parties? What should the franchisor look for in evaluating a franchisee? How do you "close" a franchise sale? Etc.
Edward N. Levitt is a franchise lawyer and partner with Gowling LaFleur Henderson LLP -- more commonly known as Gowlings
For more resources, visit http://www.gowlings.com/