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Get ready to Market your Franchise!

Written by : Expert Articles
2009-11-15

How to Sell a Franchise Business

How to sell and market your franchise is the key to growing your business. At Occasion Franchise.ca we will you help formulate a plan of getting your concept in the hand of entrepreneurs that may be interested in your concept.

Portals to adventure

One of the ways to get great exposure for your new franchise concept is using portal advertisements. There are many portal sites including Occasion Franchise Network that consist of Canada.occasionfranchise.ca, the Journal of franchise.com and the franchise channel tv.com to name a few.

There are many lead portals that, for a fee, usually $15 to $50 a lead, depending on how specific the lead is. These leads come with pertinent information about a prospective franchisee such as their location preference, funds for investment, and prior career experience.

You may also run targeted ads in trade specific magazines. This is a great source for targeting your advertising dollars. Your can run ads in local newspapers, where you want to sell your franchise. These run anywhere from $50 to $100+ per Sunday insertion. Note; run only on Sunday. There are also some free sources of ad placement.

Referrals

One of the best ways of selling a franchise idea is referrals. Referrals are a terrific way of helping to build your business. Many people that love your concept may actually tell others about the opportunity.

Pay a referral fee to your franchisees is also a great way to get the franchises that you have previously sold in promoting your business. This way they will not see telling others about the business as just competition. And last, but not least, there are those people that see your business and will ask about a franchise. Get their number, and follow up.

You are the best person to sell your franchises. You have the most knowledge and passion about how to franchise your business.

Selling your franchise can be a challenging task. It will be made simpler if you put on the shoes of the franchise buyer and focus on what they want and how to best present that solution to them. Buyers buy because they want to.

Think like a buyer.

Think what they may need from you the franchisor. How to sell your franchise with our help and your enthusiasm can be easier than you may think.

How to Expand Internationally
Many franchisors initiate their global franchise efforts through serendipity. Perhaps a foreign investor looking for a franchise came across their listing at Entrepreneur's FranchiseZone, and that chance encounter leads to an international franchise opportunity. But encounters like this aren't an effective strategy for international growth.



Unless you're one of the lucky franchisors that have a strong international candidate fall into their laps, you'll need to do some proactive marketing to generate your international prospects.



Franchisors targeting international growth are well advised to start by targeting a specific country or group of countries in which they would like to expand. To do so, the first step is to identify the best countries for your particular concept. Factors such as franchise climate, the market for your particular product or service, competitive factors, proximity, language barriers, culture, political climate and relevant legal concerns should all be factored into the decision.

Countries that currently have franchise regulations are:

  • Australia
  • Brazil
  • Some provinces of Canada
  • China
  • France
  • Indonesia
  • Italy
  • Japan
  • Malaysia
  • Mexico
  • Russia
  • South Korea
  • Spain
  • U.S
  • Venezuela
Once you've targeted an appropriate market, prospective international franchisees can be generated in a number of ways: trade shows, franchise shows, trade missions, the internet, targeted public relations, print advertising, direct mail and the use of brokers are among the most popular means.

Perhaps the most difficult method is to try to go it on your own. This involves the creation of an international lead generation strategy with all the complexities of the international sale. Unless you have a strong knowledge of a particular market, this strategy is likely to generate a substandard partner or fail entirely.

One alternative to the strictly do-it-yourself approach is the Gold Key program available through the U.S. Chamber of Commerce. Simply contact the appropriate U.S. embassy and, for a modest fee, they'll assist you in researching the market and identifying potential partners. They'll even set up meetings with these partners. All you have to do is show up and negotiate the deal. Still, this strategy has some substantial drawbacks--not the least of which is the amount of time and energy you'll need to expend in order to effectuate a deal.

One popular means of targeting prospects is the use of international trade missions. Sponsored by groups such as the International Franchise Association, trade missions attempt to provide franchisors with introductions to a number of qualified candidates in each country. The franchisor is typically responsible for its own expenses (which can run upwards of $10,000), their own follow-up and their own negotiations. The sponsoring organization is responsible for the logistics and providing the introductions.

But the most effective approach for franchisors that are really committed to their international expansion efforts involves the use of brokers specializing in international development. Their knowledge of specific markets, combined with resources in those markets, allows brokers to effectively promote your franchise within a particular market.

Brokers will generally start by networking within a country and directly contacting the best potential partners in a specific market to determine their level of interest. Brokers usually won't ask the franchisor to visit the country until they've generated some serious interest, and often the candidates will visit you as a first step, thus minimizing the time you spend in this process. More important, this direct contact approach will generally result in the best candidates and the best follow-up, as the broker will derive a substantial portion of their compensation based on "success fees," which often range upwards of 20 percent of the initial fee.

While some brokers are willing to work on straight commission, the best brokers generally require you to offset out-of-pocket expenses, underwrite the development of market research (which may cost $10,000 or more per market), and pay them a stipend while they're involved in the search.

Regardless of the means used to generate your international prospects, unless you're relying entirely on serendipity, you should plan on spending money in the sales process. Travel costs alone will likely run in the tens of thousands of dollars before the deal is finalized.
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