Franchise Development Assistance for New and Emerging Brands
by Carey Gille
It’s been estimated that 300-350 new concepts enter the franchise marketplace each year, adding to the four thousand or so brands who’ve already established themselves as viable business opportunities. This means that, right out of the gate, new and emerging brands often find themselves at a severe statistical disadvantage. The majority of these early stage franchisors face three basic challenges – they must find qualified franchisees, successfully promote their business opportunity, and build and maintain a healthy support infrastructure that fosters happy and profitable franchisees. And they have to do so in the most hyper-competitive of business environments. But thanks to a franchising industry that fully embraces innovation and a forward-thinking mindset, new and emerging brands now have access to an ever-increasing amount of tools and resources that help these underdogs even the odds.
Making the Grade
There may be millions of small businesses in the U.S., but only a select few actually have the potential to become a franchise opportunity – a path many agree is one of the fastest ways for brands to achieve strategic growth and expansion. To consider this option, a business model must have several common attributes that meet the threshold of franchise-worthiness. These factors include a solid value proposition, market demand, enough key differentiators to separate them from the competition, and a product or service that can be replicated without infringing on the profit margin. The business must also be sustainable, in excellent financial health, and have founders willing to cede a reasonable amount of control to meet the rules and regulations mandated by the FTC, which oversees franchise industry compliance.
The Struggle is Real
For businesses fortunate enough to enter the franchising industry as a new and emerging brand, the struggle is real. Even when their business offering is a compelling proposition, very few launch with the appropriate amount of funding, human capital, and resources necessary to drive successful franchise development. Whether these new franchisors realize it or not, they’ve just reached a crucial inflection point – a crossroads where they must decide whether to circle the wagons and take everything in-house or outsource their franchise development efforts to a third-party.
Enter the FSOs
Over the past decade, the industry has witnessed a rapid increase in franchise sales organizations (FSOs) who specialize in partnering with brands to assist with franchise development, enhance lead-generation, and drive sales at the unit level. Typically, in exchange for a monthly retainer fee and a percentage of commissions on closed deals, franchise brands can partner with FSOs who have the manpower and experience to provide expert advice and comprehensive guidance for every stage of the sales process. These organizations are well-known for developing tailored strategies designed to target specific buyer profiles that align with the franchisor’s ideal ownership profile. In addition, most FSOs maintain close relationships with the franchise industry’s top brokerages and consultancies, who have the power to introduce and promote brands to their own extensive network of highly qualified candidates. Typically staffed with a deep bench of experienced franchise industry veterans, FSOs specialize in developing scalable strategies for franchisors designed to foster accelerated, but responsible, growth.
Value-Added Assistance
Only the most forward-thinking FSOs are bringing a highly technical approach to the franchise sales process. This includes the development of proprietary programs and secure online portals that offer value-added benefits designed to assist franchisors and consultants alike. Thanks to these initiatives, franchise consultants can now access and track real-time updates on communications between the FSO and brand executives, verify the status of individual candidates currently engaged in the brand discovery process, review current FDDs, and conduct up-to-date searches for available territories. Likewise, brands can take advantage of educational and professional development programs that address franchise development at the executive level. Examples include administrative sales support, mentoring, professional development, one-on-one coaching sessions, private groupthink sessions, and even access to preferred vendor partnership networks, which offer third-party outsourcing solutions for bookkeeping, payroll, HR and recruiting, insurance, marketing, background checks, and IT services. The ultimate goal of these value-added services? Training brand executives to spend the majority of their time and effort working on the business…and less time working in it, while continuing to provide best-in-class processes and support for their franchisees.
According to the 2024 Franchising Economic Outlook, an annual report published by the International Franchise Association (IFA) and FRANdata, the industry has never been more healthy or robust for new and emerging franchisors. The number of franchise establishments in the U.S. is fast approaching the one million mark and now employs nearly nine million Americans who contribute a combined $827 billion in economic output. New and emerging brands will continue to increase the number of available concepts in the franchising marketplace. But even with one franchise unit opening every eight minutes on an average business day, there is still plenty of room at the table for any brand that aspires to become The Next Big Thing. It’s an amazing time for all of us who work in the franchising industry. Because the opportunity for up-and-coming brands to go from surviving to thriving has never been more prevalent – starting strong and staying strong throughout their growth and on behalf of their franchisees.
Carey Gille is the co-founder and CEO of Franchise FastLane, the No. 1 franchise sales organization (FSO) in the U.S. The company currently handles franchise sales and development for a select portfolio of 25+ high-performance brands. To date, their efforts have resulted in over 7,000 territories awarded, positively impacting thousands of lives in communities from coast to coast. Under Carey’s leadership, Franchise FastLane developed and deployed CarPool, a coaching and administrative services program designed to meet all franchisors where they are in the development process and assess their potential for accelerated growth. In addition, FastLane launched MasterMind, an internal development program reserved for executives of the brands they represent that offers one-on-one coaching, mentoring, administrative sales support, and access to groupthink sessions. Carey can be reached at fastleads@franchisefastlane.com.