The Top of the Funnel

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Franchise Lead Generation

You can’t put three franchisors in a room together without this subject coming up. Franchise lead generation is so much more than just buying names or waiting for web forms. This is multivariable; you need to choose the right lead sources, understand where each prospect is in the buying process, work each source differently, and track what actually created the first real exposure to your brand.

For most franchisors, the question is not whether portals, brokers, trade shows, website leads, content, and referrals all have merit. The question is which sources fit your brand, how each one should be worked, and whether your follow-up and tracking are strong enough to tell you what is actually working.

Going back to our hypothetical three franchisors in a room, here are some questions you might hear:

  • Portals: love them or hate them?
  • Brokers: your lifeblood, a necessary evil, or a bane to the industry?
  • Is content marketing the new PPC?
  • How do you get ChatGPT to show your content?

And on and on and on.

I am of the belief that all forms of lead generation have merit. The key to franchise sales is understanding that not all leads are created equal. Portal leads are often just starting on the thought process, whereas broker leads have already gone through several time-intensive steps.

This is simple, but not easy; choose the right sources, understand where each lead is in the buying process, work that lead source appropriately, and track where the prospect really first encountered your brand.

Portals

Many searches for franchises on the Internet lead to one of the popular portals; Franchise Gator, Franchise Direct, BizBuySell, and others. I believe that presence on the top performing portals is essential to any good franchise development plan.

“Wait,” you say, “I have heard portal leads are a waste of time!” Yep, me too. The truth is that portals are a mixed bag. Three years ago I would have told you that franchisors say that because portal leads require A LOT of work. That is still true, but a lion’s share of them also actually end up in broker networks now, as well. Having said that, portals should still be part of your lead generation plan unless you have eliminated them for your specific brand after working them correctly.

The key to working portal leads successfully is this: they require relentless follow-up. Portal leads are often very early in the process and are shocked when they get 10 calls right after they inquire. So, if you do not have the wherewithal or staff to follow up on these leads properly, put them on hold until you do. However, with a proper franchise sales process, they are definitely a benefit, and I have personally sold hundreds of units this way. For more on how to engage properly, check out Be First or Be Last.

Franchise Shows

Trade shows allow you to interact with 15,000 or more people in a three-day period; individuals paying for the right to speak with you. That is the exact scenario with a national franchise show. These are really a no-brainer for a robust recruitment strategy. Again, though, you have to execute correctly.

I am constantly shocked when I attend a franchise show and see exhibitors that spend between $5,000 and $10,000 to attend, sitting on a chair in their booths looking at their phone. Franchise shows are exhausting, painful, and lucrative. If you do not have the first two, you will not have the last one. Regional franchise shows have their own cost-benefit analysis. You will have lower turnout, but also less competition for attendee attention. Regionals are a great way to get exposure in your high-value target markets.

Brokers

Brokers, coaches, consultants; they are known by many names. Basically, franchise brokers are responsible for generating their own leads, and they refer interested parties to franchisors. If their referrals end up purchasing your franchise, you will pay them a substantial fee, typically a minimum of $25,000 but often more.

In my opinion, most franchise broker systems are worth it for most franchisors, with some exceptions. Many young franchisors should not pay the $10K+ initial investment that some of the higher-end networks charge, and some brands are either so niche or have such slow growth plans that the broker networks just do not work for them.

If you choose to work with brokers, and I think most franchisors should, then you need to learn how. This is not a set-it-and-forget-it model, though it is often treated as such. I recommend that, once you list with a broker network, you get in touch with as many of their individual brokers as you can. Share your passion with them. Learn about them. Also, most of the networks have conventions each year, and you should attend. This is an event to send your top salespeople AND at least one C-level individual.

On-Location Recruiting

If your franchised businesses have a physical location, such as a retail store or restaurant, incorporating franchise recruitment into your build-out and store design can be a boon to franchise sales. In 2009, Quiznos® estimated that 70% of its franchise inquiries came from on-location recruitment, simply from the “now franchising” tag at the bottom of the company’s napkins and drink cups. Membership-type franchises can do something similar with billing invoices.

A good way to augment on-location recruiting is to offer a small incentive to franchisees that refer prospective candidates, and also give recognition to them. Depending on the costs of your franchise, a small spiff of between $500-$2,000 back to the franchisee who refers a successful candidate can go a long way in producing these kinds of leads. It is imperative that any such franchisee incentive program be reviewed and approved by your franchise counsel, however, as too much of an incentive can turn your franchisees into de facto franchise salespeople, triggering all sorts of franchise laws.

Other Lead Sources

There are many other methods of lead procurement, including social media, print publications, on-location recruiting, your corporate website, and more. These are covered in great detail, along with sample budgets ranging from the low thousands to the high hundreds of thousands, in the book How and Why to Franchise Your Business.

Lead Source Tracking

This is something I see missing from many franchisors; tracking the actual source of a lead. It is important to understand that, as an example, while it is very possible that someone came to your website by searching best ____ franchise, it is equally possible that they saw you on a franchise portal, in a magazine, through AI-assisted research, or by visiting one of your locations. It is imperative that for every candidate you speak with, you discover where their first exposure to your brand was, and what prompted their inquiry.

If your lead generation plan is producing volume without qualified conversations, or if you are not sure which sources deserve more budget, we can help you evaluate the funnel. The goal is not more leads for the sake of more leads. The goal is the right mix of sources, follow-up, tracking, and sales discipline for your brand.