The 5 Questions Franchisee Candidates Will Always Ask

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The 5 Questions Franchisee Candidates Will Always Ask

We all know how important it is that a new franchisee is the ‘right fit’ for a franchise, and that a colossal amount of time and effort can be required to find these ideal candidates. Given this investment, it’s crucial not to come unstuck when your candidate wants detailed information about their likely operating area – and they expect you to have it at your fingertips.

Here are some suggestions to help you close the deal without needing to compromise.

What franchise territories are available near my home?

The key here is to have your territories pre-defined across the country. This makes it simple to demonstrate territories in the relevant area and negates what can sometimes be awkward negotiations early on in the selection process.

When it comes to candidates viewing your maps at their leisure, the easiest way is to send them a digital computer generated territory map which will enhance your professional image with company logos and branding. These maps also help convey the worth of a territory by enabling candidates to zoom in on their PC and clearly view details of available geographic areas and supporting statistics such as demographic information.

What is my territory based on?  

'We drew a line around the nearest town' is not usually the best answer given the wide variation in population and business numbers between areas.  All places are not created equal. Rather you need to ensure territories contain sufficient numbers of prospective customers relevant to your business. For some companies this may simply be a specific number of households or population but others may need to narrow things down, for instance to families with young children, wealthy senior citizens, companies in specific industry sectors.

Additionally, there is often enough business in large towns and cities for more than one franchise so awarding a town to a single candidate could mean lost opportunity for your business as one franchisee simply cannot meet all the demand.  Conversely, franchisees in more rural areas may need a larger geographic area to provide enough potential customers.

Why can’t I have a bigger area?

The secret to this is to make sure you can justify why the territories are the size they are, either by comparing with your own operating area or any existing territories. If territories contain as many prospective customers of the right type as your own area or other territories, you can be comfortable assuring a candidate that they have as much potential for success as yourself or other franchisees.

In any event, a bigger territory does not automatically equal more profit.  Travel expenses could be greater not to mention the time spent driving instead of talking to customers.  If customers come to you, and they are rarely prepared to travel more than 15-20 minutes, it is pointless having a huge territory if a large proportion of likely customers have an hour’s drive to reach your store.  The only exception to this is if your product or service is truly unique and your customers will do whatever it takes to reach you.

Is my area exclusive?

For the vast majority of franchises, the answer should be a resounding yes.  For some types of franchises this will mean franchisees have an exclusive operating area whereas for others, such as services aimed at children for instance, the franchisee will have no control over where customers actually live but can be given an exclusive area in which they are allowed to market. If enquiries are centrally generated via a website, again if franchisees have exclusive areas it is easy to then direct enquirers to the right franchisee.

Where do I start?

One of the best pieces of advice you can give is to market the territory wisely. Studies show it is more effective to market 500 people 10 times than 5000 people once – the reinforcement of your message over time works wonders.  But you also need to be marketing to the right people – those most likely to respond to your marketing and buy from you.  This is where understanding what your best customers look like and where similar types of people live is important to ensure your  franchisees get off to a flying start by targeting their marketing in the best areas. To easily illustrate where these key areas are located within a territory, demographic maps can be created clearly shaded to highlight areas of high potential.

Answering some of these questions may seem a little daunting but a chat to a specialist in the field of territory design will usually set you on the right track.

Graham Barlow, MD at Tech4T, Territory Specialists. Please complete the form below to ask any questions.

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