Marketing for Franchise Sales by iFranchise Group

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About Us

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Overview of Franchise Marketing ◦ ◦ ◦ ◦

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Paradigm for Franchise Marketing Tools for Franchise Marketing Working with Brokers Diagnosing Sales and Marketing Problems

A Digitally-Integrated Approach ◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦

Website Development Public Relations Social Media LinkedIn Marketing Content Development Search Engine Optimization Pay-Per-Click Advertising Digital Lead Generation

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Mark Siebert, CEO, the iFranchise Group ◦ ◦ ◦ ◦

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27 consultants across four functional specialties 500+ years of experience in franchising 98 of top 200 franchisors 200+ articles and 30+ years of consulting experience

Matthew Jonas, President, TopFire Media ◦ ◦ ◦ ◦

National recognized Public Relations Agency One of the nation’s premier digital media agencies One of the few with a franchise specific focus Both consumer and franchise lead generation practices

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Will provide copy of presentation upon request

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Lots of material to cover – so please hold questions until the end

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More hands-on experience than any other firm ◦ ◦ ◦

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More “senior level” experience ◦

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27 consultants with over 500 years of franchise experience Our consultants have worked with 98 out of the top 200 franchise companies worldwide Offices: Chicago, Dallas, Los Angeles, Miami-Fort Lauderdale, Atlanta, Toronto, Dubai, Riyadh

Former CEOs, CFOs, EVPs of two dozen major franchise companies  Adia (now Adecco), Armstrong Tile, Auntie Anne’s, Dunkin’ Donuts, LINE-X, Pearle Vision, McDonald’s, PIP Printing, Schlotzsky’s, Snap-on Tools, Snelling & Snelling, and other national brands Experience with start-up and established franchise programs Vertical specialties by industry segment

Breadth across four functional areas ◦ ◦ ◦ ◦

Strategic Planning Quality Control Marketing Organizational Development and Implementation

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More Data = Better Data (track 200,000+ leads)

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TopFire Media ◦ ◦ ◦

Nation’s first fully integrated media firm -- SEO, PPC, Social Media, Blogging, PR, and Website Design and Development Both brand/consumer focused and franchise lead generation Recent honors and awards:  Best new agency (Ragan & PR Daily Ace Awards)  Best Website Finalist (PR News)  Best Media Relations Campaign Finalist (PR News)  Best Website Finalist (PR News)

Average Franchisee Recruitment Budget (in Thousands of Dollars)

$225 202.5

$200 $175

186.8

181.5 166.7

162.8

$150 $125 $100 $75 $50 $25 $0 2015

2016

2017

2018

2019

Franchisor Marketing Dollars by Media Percentage of Total Expenditures: 2015-2019

60%

Almost 60% of Franchise Lead Spend is Focused on Digital Media

50%

40%

30%

20%

10%

0% Internet/ Digital

Franchise Website

Social Media

Direct Mail

2016

Trade Show

2017

Public Relations

2018

In Market Meetings

TV/Radio

Other

2019

Source: Franchise Update 7

Source of Franchise Leads by Media Percentage of Total Leads Received: 2014-2018

80%

And Over 70% Franchise Lead Generation Comes from Digital Media & PR

70% 60% 50% 40% 30% 20% 10% 0% Internet/ Your Digital Franchise Opportunity Website

Referrals

P.R.

Email Mktg.

Direct Mail

TV/Radio Unknown

Other

Source: Franchise Update 2014

Trade Shows

2015

2016

2017

2018 8

Breakdown of Expenditures on the Internet/Digital 2016-2019

70%

Unfortunately, many franchisors are spending their money in the wrong places where it is least effective

60%

50%

Note emergence of remarketing

40%

30%

20%

10%

0% Franchise Opportunity Sites

Other Business Media

PPC

SEO

Email Marketing

2016

2017

Social Remarketing/ Networking Target Trailing

2018

Social Media Advertising

Digital Asset Creative

Sponsored Content/ Native Advertising

2019

Source: Franchise Update 9

Average Closing Costs

(Media Dollars Per Sale Excluding Broker Fees)

$10,000 $9,000

$9,451

$9,142

$8,571

$8,000 $7,558

$7,000 $6,000

$6,301

$5,000 $4,000 $3,000 $2,000 $1,000 $0

Source: Franchise Update

2013

2014

2015

2016

2017

The Franchise Sales Pipeline Public Relations

Print Advertising

Trade Shows

Direct Mail

Example CPL = $250

Example CPL = $150

Example CPL = $100

Example CPL = $75

Internet Leads Example CPL =$25 - $75

Brokers Cost Per Sale =$15K - $25K

Referrals/ Unsolicited CPL = $0

Lead Generation Time Varies by Media

Average CPL: $113

Send Marketing Materials, Prequalify, Schedule Meetings

Meet With 3 – 10% of Leads

Convert 15% - 20% of Completed CIRFs to Sales

Initial Meetings with Candidates Further Qualify

Follow-up meetings, assist with business plan & secure financing

Award Franchise

Average 45 – 90 Days Lead to Meeting Time to close can range from 30-90 days or more following the initial faceto-face meeting Total time to close: often 12-20 weeks Average Marketing Cost = $8,571 per sale Overall Expected Close Rate = 1.8%

Source: Franchise Update.

1111

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Start locally, then regionally ◦ ◦ ◦ ◦ ◦

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Cluster support More effective franchise advertising Consumer advertising economies Brand building Buying economies

Don’t expand faster than your support capability ◦ Quality control is key ◦ Nothing sells franchises as well as happy and successful franchisees ◦ Three-hour drive time

Different franchises require us to target different types of franchisees – affecting the media and message used for effective marketing. 

Identify your prospect as narrowly as possible. ◦ Survey competitors   

Background Hot buttons Media

◦ Survey franchises 

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Are we selecting the right lead generation strategies? Is the advertising message appropriate for our targeted franchisee profile? Are we targeting the right prospects and using the right media based on our development strategy?

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Franchise marketing is very different from consumer marketing Franchise marketing is highly regulated. Tools: ◦ Your web page should be your first concern ◦ A full-sized brochure is essential for credibility

◦ Develop a mini-brochure for the sake of economy ◦ Video - “the new brochure”

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Be sure to have your attorney and registration states review all materials

May Represent 100 to 200 Franchisors

Contacts Suspects Prospects Opportunities Revenue

Local Leads

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Attract Sell on “no-cost consultative” approach Pre-qualify Refer to 3 – 6 Franchisors Get paid regardless of which is bought

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Franchisor 1 Franchisor 2 Franchisor 3 Franchisor 4 Franchisor 5 Franchisor 6 Franchisor 7 Franchisor 8 Franchisor 9 Franchisor 10 Franchisor 11 Franchisor 12 Franchisor 13 Franchisor 14 … … 17

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Increasingly more important in the franchise development process ◦ Level of professionalism and scrutiny has increased, driving out weaker, less legitimate players ◦ In 2000, 11% of new units came through brokers. Now it is more than 30%. ◦ 60% of all franchisors use brokers as part of their overall franchise development strategy ◦ 93% have made at least one placement with a broker network

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Brokers do not replace the need for an internal sales force. Source: Franchise Update, iFranchise Group 2013.

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Mostly a pay-for-performance ◦ Some charge a monthly retainer – $2K to $5K ◦ Commissions average $13K per ◦ Commissions on additional sales ◦ Multi-unit, ADA, area rep more ◦ Some system entrance fees - $20K ◦ Some advertising requirements

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Negotiable for bigger brands Payout when funds clear Non-exclusive

Tend not to accept new franchisors

Diagnosing Sales Problems

Publicity

Brokers

Trade Shows

Direct Mail

Internet

HighLead lead costs Could indicate could problems indicate concept media selection problems Low conversions could indicate Face-to-Face/Discovery Day Could indicate In short, close analysis Poor marketing materials Sales problems of various media-specific -Urgency marketing and sales statistics Low conversions Few leads where -Setting Agenda can indicate could indicate Close could indicate -Closing Skills problems may exist, allowing poorof sales skills or lack broker for appropriate corrective action. poor validation confidence

Referral

12 weeks

Marketing and Sales Audit Process Sales Factor

Franchise Concept Itself

Potential Problems • • • • • •

High unit investment Financial performance Look and feel Franchise structure Value proposition Franchisee validation

Symptoms

Diagnosis

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Bad/No P.R. Low unsolicited inquiries Losing sales to competitors Repeat objections not overcome Prospects go dark after validation

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Evaluate design/construction model Comparative financial analysis Evaluate unit economics/ops Contract comparison Marketing comparison Phone interviews of franchisees Franchisee satisfaction surveys (web) Evaluate real estate portfolio Survey “lost” sales

Historical vs. norms Media specific analysis Performance vs. competitors Message vs. competitors Franchisee or competitor surveys

Franchise Lead Generation

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Media Selection Media Mix Message Ad Spend Target Audience Timing

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High lead costs Low close rates Message confusion Few qualified prospects Low quality lead sources predominate

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Franchise Marketing Materials

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Target Audience Materials Used Message Inadequate differentiation Design Quality Production Quality

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Bad/No P.R. Low unsolicited inquiries Losing sales to competitors Repeat objections not overcome Lose sales to market leader Low application rate

• Review for best practices • Message based on surveys • Application rate vs. norms

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Lead handling Follow up Effective Process Sales Skills Salesperson Motivation Sales Tools Staffing v. Goals

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Low application rate Low discovery day rate Low close rate Long “time to close” Variances in salesperson close rates Un- or under-worked leads Few broker leads

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Sales Process & Technique

Historical vs. norms (close, speed, etc.) Salesperson vs. salesperson Historical vs. past performance Develop sales process map Mystery shop sales force Leads per salesman Sales per salesman Broker validation calls

Problem Resolution – Phase Two Sales Factor

Franchise Concept Itself

Confirmed Problem • • • • • • •

Unit investment Financial performance Look and feel Franchise structure Value proposition Franchisee validation Real estate model

Potential Solutions • • • • • • • •

Value engineer design and construction process Suspend sales and work on business model, support, franchisee training Retain design firm, consumer marketing firm, or PR firm as appropriate Revise franchise business structure Provide incremental value or reposition concept Communications plan, FAC, address survey-specific concerns Improve real estate process Develop third-party financing programs

Franchise Lead Generation

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Media Selection Media Mix Message Ad Spend Target Audience Timing

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Develop formal marketing plan based on survey results Alter marketing mix to focus on higher-quality lead sources Alter message based on survey results Increase advertising expenditure based on goals Optimize website and PPC campaigns Develop and measure benchmarks; rotate bottom 10% quarterly

Franchise Marketing Materials

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Target Audience Materials Used Message Inadequate differentiation Design Quality Production Quality

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Rewrite, redesign, and reprint materials as appropriate Develop or revise standard sales correspondence Rewrite and redesign web pages as appropriate Add technology improvements (auto-responders, sales software, etc.) Develop additional promotional tools (video, etc.)

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Lead handling Follow up Effective Process Sales Skills Salesperson motivation Sales Tools Staffing v. Goals

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Develop and map effective sales process Train sales staff and provide guidelines to non-sales staff Replace poor sales personnel Benchmark and measure performance Alter compensation Evaluate external resource opportunities (FSO, LQS, software solutions) Add sales professionals, support staff, or both Proactive broker programs

Sales Process & Technique

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Everyone believes they have the solution to lead generation ◦ ◦ ◦ ◦ ◦

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PR practitioners – credibility Ad agencies – predictability Social media firms – engagement Search engine optimizers – visibility Video houses – compelling storytelling

Messaging is not coordinated across media professionals When your only tool is a hammer, every problem is a nail

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Most emerging franchise concepts do not have an unlimited marketing budget Circumstances are very different ◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦

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Goals Budgetary restrictions Geographic focus Concept Validation Profile of your franchisee Quality of existing websites and materials In-house resources and their capabilities Competitors

Need to allocate resources based on an an integrated lead generation strategy A canned approach will not work

Source: FranchiseUpdate.com

Your message is no longer centered on print media.

Instead, integrate all media around your website.

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A focus on visual appeal alone can be a disaster

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Too many websites lack ◦ ◦ ◦ ◦

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Optimized content Mobile-friendly designs Organic traffic Substance over flash

Develop a plan to increase unique visitors, convert traffic, and improve franchise lead rates. ◦ Responsive design with mobile in mind ◦ Effective calls-to-action ◦ Longer amount of time spent on-site

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Public Relations as a next step ◦ ◦ ◦ ◦ ◦ ◦ ◦

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Positions brand in marketplace Builds credibility Generates franchise sales leads Creates brand awareness Establishes thought leadership Amplifies marketing initiatives Validates your concept

By creating inbound links, PR also helps increase your SEO efforts

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Consumer audits – accountable for predetermined increase over base levels Participation in digital activities, social media, and web traffic Consistent increase of Facebook likes, tweets, reposts, shares and links

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Event attendance (as scheduled)

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Analysis of PR spend vs. ROI •

Measure year-over-year increase in coverage and impressions

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Inbound leads (typical close rate of 8% to 12%)

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Impression goals

“The best place to hide a dead body is on the second page of a Google Search.” 

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75% of users never scroll past the first page of search results There are over 170 million Google results for the word “franchise” Google is more than 65% of all online search ◦ ◦ ◦

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Google’s algorithm — a closely held secret The algorithm changes up to 500 times a year. Google’s goal: Deliver fresh and relevant content to the searcher

Ranking factors fall into four basic categories

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On-page coding On-page content Inbound link authority Social media signals

Assessment

Social Media

Develop Links

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Google’s algorithm changes constantly.

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It searches for “fresh” content.

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It searches for “relevant” content.

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Your competitors are optimizing while you are not – driving them to the top.

Coding

Content

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Social media is important in its own right – Not just for SEO ◦ Defines the image of your franchise brand ◦ Validates your business model   

76% of all internet users are now active on a social media 82% of the 30-49 year old bracket 65% of the 50-64 year old bracket

◦ 47% of people that follow a brand on Twitter are likely to visit that company’s website ◦ Pinterest has more than 100 million users (85% female) ◦ Instagram has 500 million monthly active users

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Conversations

◦ Average person sees over 3,000 ads a day ◦ Only 14% of people trust advertisements ◦ But 92% trust the recommendations of others

*http://www.jeffbullas.com/2014/01/17/20-social-media-facts-and-statistics-you-should-know-in-2014

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Focus on a specific audience ◦ ◦ ◦ ◦

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Enhance your presence ◦ ◦ ◦ ◦

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Target groups Strategy development Visual branding Community development

Create engaging content Develop a plan Develop guidelines Execute

Listen and respond ◦ ◦ ◦ ◦ ◦

Hootsuite Social Mention Google Alerts Business Wire Wildfire

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Largest network of professionals online ◦ ◦ ◦ ◦

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More decision makers are on LinkedIn ◦

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CEOs have an average of 930 connections

LinkedIn usage ◦ ◦

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450 million members 4 million business company pages 2.1 million LinkedIn groups 40% of users check LinkedIn daily

Highest among the 30-49 (32%) and 50-64 (26%) age groups Far above-average among those with a college degree (46%)

LinkedIn usage trends upward alongside household income (HHI) ◦ ◦

44% among those with HHI of at least $75k More than triple the rate for those with less that $30k in HHI (15%)

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Email marketing is not dead! Email marketing can be easily integrated into your marketing strategy and cause it to be more effective. Email marketing enhances the relationship of your business with its current or previous customers. ◦

Encourages customer loyalty and repeat business

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ROI can easily be tracked with less delay

With the growth of mobile and the future of mobile e-commerce, email marketing is just getting started… ◦

98% of prospects check their email at least once a day.

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Email is the most popular activity on smartphones among users ages 35-52. Sources: statista.com, mailerlite.com, expresspigeon.com, 2016-2017

Industry Publications

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Why it is so important ◦ ◦ ◦

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Highly targeted marketing Google fields 1.2 trillion queries per year Top 3 sponsored links account for 41.1% of the clicks Poorly managed accounts drive up costs quickly

Test-Refine-Test ◦ ◦ ◦ ◦ ◦ ◦ ◦

Keyword research (including negative keywords) Campaign development, budgeting, and bids Ad design and testing Build custom landing pages Ongoing PPC monitoring and management Google display retargeting advertising Google display advertising

We create Integrated Lead Generation Marketing plans tailored around your budget and goals! TopFire Media meets industry needs head-on with our fully integrated approach ◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦

Digital Lead Generation Website Development Search Engine Optimization Public Relations Social Media Publishing LinkedIn Optimization Email Marketing Content Marketing (Blogs) Pay-Per-Click Advertising

It never hurts to get a second set of expert eyes on your online marketing presence! ◦ ◦ ◦ ◦ ◦

Website Audit SEO Performance & Rankings Social Media Channels AdWords Audit Social Media Presence

www.ifranchisegroup.com 708-957-2300

www.topfiremedia.com 708-249-1090

If you would like a copy of this presentation or a complimentary assessment, please provide us with your business card.