4 Franchise Development Budget Planning Mistakes to Avoid
It’s everyone’s favorite time of year…budget season. Almost no one (that I know of) enjoys trying to figure out how to make the most of a limited amount of development dollars to achieve maximum franchise development.
Despite the seemingly endless meetings and ensuing headaches that accompany budget planning, there’s no escaping it. To make this year’s planning a little easier for you, we’ve put together the four most common budgeting mistakes that franchise marketing and development teams tend to make, along with ways to fix them.
1. Relying too heavily on brokers for qualified leads.
Brokers can charge a hefty fee – usually $15,000 – $20,000 or more. The benefit is you only pay when a deal actually closes, but brokers typically represent a multitude of brands – often a hundred or more – so it can be a lot of work just to keep your brand top of mind within your brokerage. Plus, the fee doesn’t cover the time and work you need to put into the sales process once you get the lead. If you have the budget, brokers can be a valuable asset, but better to spread some of that budget around to try less expensive, but more diverse avenues that could garner great results.
2. Spending too much time and energy on portals.
We’re not saying not to use portals – they’re a relatively inexpensive and effective way to bring in a high volume of leads, but be aware that the cost to convert those leads is going to be much higher than other channels that bring in fewer but more qualified leads. For example, Franchise Business Review only allows the top 200 ranked franchise companies (based on our franchisee satisfaction research) to take leads through our site, and each brand has its own individual profile page and submission form. You’ll probably get fewer leads than you would through a portal, but the ones you do get result in more meaningful conversations with people who are serious about investing in only the best franchise opportunities.
3. Overestimating the ROI of tradeshows and expos.
Sure, tradeshows can be a great opportunity to meet candidates. And some development teams feel that just having a presence – to get their brand name in front of candidates – is worth the time and money. But, tradeshows are expensive. Between the travel, hotels, booth costs, giveaways, entertaining, and time out of the office, they’re probably one of the most expensive forms of lead generation. Are you measuring the ROI and is it worth it? Instead, think about allocating some of your tradeshow budget toward other less expensive but higher ROI tactics. FBR’s Recruitment Bundle starts at $2,500/quarter and gives you multiple opportunities for exposure, including advertising, lead generation, company profile, validation tools, and more. Ditch one expo per year and you’ve more than made up the cost of the bundle.
4. Underestimating the power of third party validation.
Sites like Amazon, Yelp, and Glassdoor have made the power of customer reviews stronger than ever. Buyers – no matter what they’re buying – want to know what previous purchasers are saying. No matter how good your marketing, hearing what your current franchisees are saying about their experiences as an owner with your brand is the most powerful sales tool you have at your disposal. Even more powerful is gathering those reviews through an unbiased research firm like Franchise Business Review. Not only can you use the data in your own sales and marketing efforts, you can also make it available on FBR’s site where candidates search for independent validation of which brands are the best investments.
The competition for franchise buyers is only going to increase, and franchise development teams are continually going to be asked to do more with less. Time to get creative with some new tactics to gain exposure, bring in more qualified leads, and build your pipeline.
Call Franchise Business Review at 603.433.2270 and we can walk you through how to maximize your budgeting dollars to gain the most exposure.
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As the Marketing Director, Ali’s role is to educate franchise companies about and inspire them to participate in FBR’s research in order to grow and improve their brands. Ali lives in Maine with her husband and two sons.
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