Standing out in a crowded market is something we’re quite familiar with at ServiceBridge. We’re one of many in the field service management market – for example, Capterra lists over 427 field service management products on it’s site.
Many of these companies are not a direct competitor to us – field service management, like many markets, has niches within it. Some field service products focus on one-man operations or small businesses, while others focus on massive enterprises. For ServiceBridge, we’re one of a handful of field service management companies focused on service franchise networks.
Franchising represents an even more competitive market – according to the IFA’s Annual Report, there are over 1,349 franchisors that are members of the IFA. Most estimates believe there are around 3,000 potential franchise opportunities currently on the market. Potential franchisees have no shortage of options to invest in.
Much like the software market, the broader competition in the franchise space can be broken into niches. While all franchisors are competing to find qualified, talented franchisees; they often focus on their own niche within the market – but even that can be a very crowded space. Entrepreneur lists 58 different pizza franchise opportunities.
In order to attract franchisees and close new territories, you need the right pitch and the right value prop. How do service brands win the deal?
Building the Right Franchise Offering
When a business owner makes the move to franchise their concept, they’re looking for the right owners – many of the traits similar to employees you’d look for when hiring for any role. Smart, trustworthy, reliable. But unlike a standard employee, franchisees are not only investing their time into your business – they are investing a significant amount of money into the business. In many cases, investors save for years to buy a franchise, and rely on it for recurring income.
With an investment of this magnitude, potential franchisees look at every aspect of a franchise before making the decision to invest. And franchisors must provide the prospective franchisee with the information needed to make this decision.
While the franchise disclosure document (FDD) provides a great baseline of information, it’s not the only consideration for a prospective franchisee. To truly stand out in a competitive market, baseline information is not enough. While an FDD is a great and legally required source of information, franchisees often seek information and have concerns beyond the scope of the FDD, including:
1. Competitive Advantage: What advantages does this franchise have that is not offered by other franchises? In a world where there are over 50 different cleaning franchises available in the US, why sign with yours?
2. Customer Experience: What does your franchise due to ensure a positive customer experience? Franchises who have a reputation for great customer experience means more happy customers, and an easier life for the franchisee. Franchises with frustrated customers can create frustration for franchisees.
3. Demographics and Culture: What is the demographic makeup of the franchisees, and what is the culture of the company overall? An older investor looking for stable, steady income may not want to invest in a new, growing but not quite established franchise that has younger owners. Franchisees will look for a network where they feel included, and for a brand that suits their personality.
While much of the content written on franchise sales focuses on disclosure to franchisees, and the research they need to do when selecting a franchise to invest in – franchisors need to do their own due diligence as well.
An investor may have the funds to buy into your franchise – but the wrong franchisees can hurt your brand and lead to more headaches down the road. It can be fairly straightforward to attract franchise leads through conferences, web search, lead generation sites – but finding the right franchisees from the pool can be difficult. Franchisors need to consider their own values, and the type of person that works best in their system, ensuring a long-term, prosperous relationship.
Standing out from Competition
Like any sales process, prospective franchisees often compare multiple options at once – again, purchasing a franchise represents a significant investment of both finances and other resources. The right decision can set someone up for years of returns on their investment – and the wrong choice can lead to frustration and financial trouble.
A prospective buyer may be evaluating 3, 5, even 10 different opportunities at once – so how do you as a franchisor capture the attention of potential franchisees, and move them forward in your sales process? How does your home repair, cleaning, or handyman service stand out from similar offerings?
1. Unique Process: One of the biggest differentiators for a franchise is their ability to offer a unique service that nobody else does. For example, Mosquito Joe’s unique take on mosquito control has made them one of the fastest growing service franchises in the US. The Glass Guru offers a patented approach to foggy window repair that separates them from their competition. While a unique process isn’t an option for every franchise, when a franchisor has that as an advantage, it should absolutely be promoted to prospective franchisees.
3. Social Proof: One of the most effective sales tools across all business verticals is social proof – promoter scores, reviews, and the most powerful of them all, case studies. Case studies give your franchise the ability to highlight top performers, explaining how you have worked together to achieve success. Documented success helps to put potential investors at ease by seeing the proof of what you’ve accomplished.
4. Franchisee Feedback: Another key factor is ensuring your potential investors have access to franchisees. Franchisees who do not want to openly discuss there business with outside parties is one of the largest red flags for franchise fraud – it can imply that franchisees are under gag order or legal restriction. By making franchisees available to potential investors, much of the cause for concern is put to rest.
5. Marketing Strength: For prospective franchisees that are already in an industry – such as a plumber that wants to convert to a franchise – marketing is a key attraction, and every investor wants to see that a steady stream of business will come in. In addition to disclosing financial performance through the FDD, franchisors can use their marketing activities – leads generated from their SEO/PPC efforts, keyword rankings, marketing ROI information – to show prospective franchisees that they have a strong plan to grow their business.
6. Best-in-Class Tools: Franchisees want to partner with a franchisor that will empower their success – and a big part of that empowerment comes from the tools that the franchisor equips the franchisee with, such as software.
Software as a Selling Point
One of the most overlooked benefits of franchise software is it’s use as a selling point for new franchisees. Franchisors tend to look at franchise management tools through the scope of the benefits it brings them – the ability to run reports on franchisee performance, ensuring correct procedures are followed, and communicating with their franchisees.
But franchise software that includes a CRM, point-of-sale, or field service application that is used by the franchisees to operate their branch of the business is a tool the franchisor can use to empower their franchisees success. As part of the initial set up of the franchise, franchisors can include software tools as part of getting their new franchisee on the road to success.
But the introduction of software shouldn’t be limited to franchisees already in the network or who are in onboarding. Franchisors should use software as part of their pitch to prospective franchisees. Franchisors can position their software system of choice as a competitive advantage – showing franchisees that they are using the latest technology to support their network, using digital tools to empower every part of their branch from franchisor headquarters to the end customer. Reporting tools within franchise management software also allow franchisors to accurately disclose franchise performance, and give prospective franchisees real-time insight into current performance.
Prospective franchisees have dozens of options of who to invest their money and time with. How can your service-based franchise stand out and win more new franchisees? The right tools and the right approach can help close the deal.