EXPERTADVICE
EXPERT ADVICE CLINIC
Our expert panel offers advice on a range of issues for franchisors
Derrick Simpson Derrick is the managing director of Franchise Resales Limited, a company that specialises in delivering resale transactions for franchisees and franchisors. He has played an active role within UK franchising since 1988.
One or two of my franchisees want to leave – is this a problem?
In any franchise organisation there will always be one or two franchisees within the network that wish to leave. This is a natural process in mature franchises, where the franchise resale rate has been increasing year on year as networks become more established. In the past, mature franchises could expect to ‘churn’ around 5 per cent of their network but, more recently, a figure of around 10 per cent is now the norm in the UK, and in the US the figure is higher. The time at which a franchisee starts to consider their exit is sometimes driven by the length of term of the franchise agreement and sometimes by their own personal position, which may be age, health or even the simple desire for a change. With newly established franchised networks, there is also the chance that a franchisee may wish to exit earlier than expected. Often, an early request to leave is driven more by personal or emotional elements than a desire to retire or capitalise on their investment, as with a mature franchisee. Sometimes the business is just not for them or they are in dispute with the franchisor but, whatever the reason, their desire to leave can be strong.
In either of the examples above – mature network churn or spontaneous wish to leave – it is important to have in place a predetermined franchise resales process. This may be one devised by the franchisor or, more commonly these days, outsourced to a third party to fulfil. Having a structured process available to franchisees can remove most of the potential angst and risk of dispute often associated with unplanned franchise resales. So, franchise resales are not a problem, but a lack of a process in place to manage them potentially is.
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Sally Anne Butters Sally Anne Butters is director of media at Coconut Creatives, a leading franchise recruitment marketing company. She has worked in the franchise industry for over 10 years and runs regular successful ‘keep warm’ activities for her clients
What should I do with my franchisee prospect list that I’ve build up over the last few years?
Many franchisors have a database of contact details from franchise enquirers that sits untouched after the initial attempts to contact. If that is you, then why not try a few tactics to either re-engage those prospects or find out if they can be removed from your database for good? Using email software like Dotmailer or Vertical Response (there
are plenty more) will give you detailed information about your database by sending them just one email eshot or newsletter. At Coconut, we call this a ‘keep warm’ activity.
A keep warm email can be sent with news about the franchise, a short franchisee case study, a new video about the franchise, a free event or download guide or new product or service that franchisees can offer. The important thing is that you include web links to further information throughout the email that can be clicked and followed. Your email software will then be able to tell you who opened the email, clicked a link or asked to be unsubscribed. You can then begin to start a new conversation with a prospect that clicked a link or remove them from your database if they unsubscribed – a fresh start and a fresh database!
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