7 Ways to Use Data to Position Candidates (and Your System) for Success
Move beyond dreams to deliver realistic business expectations
As franchise development executives, your role transcends selling; it’s about building genuine relationships and educating candidates about what it takes to be a successful franchise owner in your system. One of the best ways to do that is using data to set realistic expectations. Here’s how:
1. Balance the Dream with Data-Driven Dialogues Share successes and challenges from your existing franchisees backed by numbers, offering a balanced view of what running a franchise truly entails. Some compelling data points to focus on could include time from signing on to opening up, days to first clients, length of time to break even, number of activities each day, hours spent on the business, or number of employees needed to run the business.
2. Utilize Third-Party Data for Business Decisions Introduce prospective franchisees to market trends, competitor analysis, and customer demographics. Share how your team uses data to help them find the right location/market, or profiling tools you use to uncover what the candidate is good at, and what skills they might look for in key employees to better support their “weaker” areas of running a business.
See how three franchisees used franchisee satisfaction data to help them choose which brand to invest in.
3. Engage Your Candidates with Existing Franchisees Organize sessions where prospects can interact with existing franchisees. Facilitate discussions (group webinars or one-on-one meetings) around key performance indicators (KPIs), financial metrics, and day-to-day operational realities.
4. Share Benchmarks for Success The power of a franchise network is accessing data from businesses just like yours. Establish realistic KPIs by using historical data to set attainable benchmarks for sales, customer acquisition and retention, and other critical metrics. This helps align expectations with achievable outcomes from the start.
5. Encourage a Data-First Approach in Decision-Making Ensure that potential franchisees understand how to interpret and utilize data. This empowers them to make informed decisions once they’re operating their franchise. Most franchisors require a business plan. Review it together and compare past candidate or current franchisee plans to set realistic goals.
6. Review FDD Items There are 23 Items in the Franchise Disclosure Document (FDD) every candidate is given when they research your brand. It’s a big document and definitely can be overwhelming to candidates who are seeing it for the first time. They should have a lawyer helping them review, but spend some time talking through the items that will educate them on your brand. Items 5 (initial fees), 6 (other fees), and 7 (estimated initial investment) can assist them in building out their business plan. Items 19 (financial performance representation) and 21 (financial statements) can be used to set realistic expectations. The more detailed the Item 19, the more your candidate can better understand how your top and lowest franchisees are performing.
TWO MEN AND A TRUCK franchisee Chris Willems shares how Franchise Business Review’s research played a major role in his due diligence process and ultimately led him to select Two Men And A Truck from the 10 brands he was considering.
7. Use Your FBR Data Your team may have participated in our franchisee satisfaction survey simply for the Franchisee Satisfaction Awards, but you now have lots of data from existing franchisees to add to your toolbox. Consumers look to reviews and third-party data to validate a buying decision, and a huge investment like franchising is no different. Make it easy for them to find the reviews they need to move forward. Show candidates your FBR Summary Report early on so they can see how your franchisees rate you in the key areas critical to business success. Highlighting data from the survey, like “92% of franchisees recommend the brand to others” or “89% of franchisees rate ongoing training and support above average” reinforces what the franchisee community thinks of the system. You can even share individual franchisees’ reviews to help candidates move through the validation process more quickly.
Data is a powerful tool in the franchise development process. It educates and empowers potential franchisees, setting them up for success. By shifting the focus from selling the dream of business ownership to educating them actual numbers, you foster stronger, more sustainable franchise relationships. If you don’t know how your franchisees are validating with candidates, or want data you can start sharing with candidates, get started with our franchisee satisfaction survey.
Informed candidates are confident and committed partners. Embrace the power of data to transform your franchise development strategy and cultivate a network of well-prepared, data-savvy entrepreneurs.
Related Content: eBook
How to Design an Effective Franchisee Vision Plan Program
What sets the top-performing franchisees apart? A clear, personalized vision for their business. This eBook is a must-read for any franchisor that wants to increase franchisee satisfaction and improve performance across your system.
Michelle is the president of FBR, the former Chair of the International Franchise Association’s Women’s Franchise Committee. and a Certified Franchise Executive. She is the recipient of the 2022 Crystal Compass Award, has facilitated CEO Performance Groups and Executive Networking Groups and is also a mentor of UNH college students. When she is not at work she is usually reading, playing outside, or hanging out with her husband and daughter.
Franchise Business Review is the leading market research firm in the franchise sector specializing in franchisee satisfaction and employee engagement. Since 2005, we have helped more than 1,100 franchise brands drive better results. Let us put our insights to work for you.