Click HERE to Go to – Start of recording
Brian Keen: Yes, it’s the place to be for all things franchising. Hello everyone, and welcome. Today’s topic is an exciting one and one that’s really close to my heart, and anybody in franchising, particularly today. Modern franchise recruitment marketing. It’s an area that we’re all impacted by, you need to be on top of it, it’s changing very rapidly.
Brian Keen: Today is a bit of a buzz. I’m delighted, after seven years of pursuing our current celebrity guest, to get him to join me today. So, a quick reminder to have your pen and paper ready because I guarantee you’ll want to take lots of notes, and you’ll probably want to replay this later as well. For Franchise Simply members, remember that this Franchise Radio Show will be available with our other 81 recordings in our members vault.
Brian Keen: Today’s guest is Glenn Walford. Glenn I’ve known for seven years at least. We actually met at an internet marketing conference in 2011, and ever since have followed each other closely. Someone I relate very well to, and lucky to have him here because he’s a man who’s always on the move. He brings a unique combination of skills and experience together in his work in franchising. He’s got a solid degree, qualified in experience, based grounding and offline digital marketing. This is before he started his own franchise focused publishing and marketing business, back then in 2011.
Brian Keen: He had extensive franchise leadership experience with organizations such as Zarraffa’s Coffee where he was marketing manager, Retail Food Group he was the national operations manager, and general manager at Lenard’s Chicken. So, you can appreciate the diversity of organizations he worked with, the range of knowledge and people he would have met.
Brian Keen: In 2011, Glenn saw the franchise recruitment market changing rapidly, saw the opportunity and jumped into the space with the world’s first and only book series on buying, selling, marketing and maximizing your franchise. His own startup he called Franchise Buyer Magazine, and that’s in the media and marketing sector. You may well have seen that. If not, I recommend you Google it and have a look at some of the information there. Very, very helpful.
Brian Keen: He’s also got a new business, launched recently, called Magnetic Franchising. That works closely with select franchise brands to effectively control and run their entire franchise recruitment marketing, so it’s a package. This is really a first, it’s really a new product. There’s nothing else like it on the market at all. In essence, all of Glenn’s work revolves around two key goals: helping buyers and investors in franchises to identify the one that fits best for them, and number two, helping franchisors expand their networks by attracting a volume of interest and the right talent for franchise recruitment that fits their systems best.
Brian Keen: So, today we’re focusing on the latter. Glenn’s worked with franchisors to help them grow their networks. Given that I know Glenn is an opinionated person, we share some robust conversations from time to time, he’s not afraid to provide his view, which I think is always healthy, and I’m sure we’ll have plenty to discuss. Glenn, welcome to our Franchise Radio Show.
Glenn Walford: Thanks, Brian. I love a long intro.
Brian Keen: Well, there we are. What I’ll do is get the ball rolling. It depends on when you’re listening to this, but we are recording this in May 2018.
Glenn Walford: Wow, it’s been seven years then!
What’s your take on the state of franchising right now?
Click HERE to Go to – 3min 53 secs into recording
Brian Keen: That’s exactly right. Currently, very topically is the fact that there’s a parliamentary franchise inquiry, which is having an impact on the market. So, my first question is, what’s your take on the state of franchising right now, Glenn?
Glenn Walford: Yeah. Thanks, Brian, and thanks for having me on the program. I think it’s the ultimate question, you know, what the state of franchising is. Franchising is, in my view, it’s clearly in a state of flux or uncertainty at the moment, but it’s not critical. Which treasurer was it that said it was … Was it Keating who said it was the recession we had to have? I think it was Keating. I think, in many ways, this applies to franchising right now.
It’s a throwaway line, yes, but I think franchising has being growing almost unchecked for just too long. These Griffith University surveys that they were doing for the franchise council was just showing this extraordinary number of new franchise systems popping up every single year in the country, and that growth, in my view, was just not sustainable.
So, every year there was another 100 systems that had come along, or 200 systems, so we ended up with something like … I think, Brian, now, we talk about 1100 something or other franchise systems in Australia, and I think that was just too many.
As a result of that, and I’ve seen it in the franchisors that I’ve helped, I just know it when I see franchisors that I speak to or systems that we engage with or talk to me at any time at expos and conferences, that this isn’t going to grow. The business they’re talking about is just not going to grow because it doesn’t offer a value proposition to the end user, which is the buyer of the franchise system or the buyer of the franchise business.
So, I think the state of franchising right now is looking shaky on the surface, but I think it’s actually a good thing. We’re going to go through a bit of pain right now, and it’s not just franchising as a sector, but it’s also individuals who have owned franchise businesses who are losing those businesses and losing houses and everything.
That’s clearly happening. No one can deny that’s happening. That is very much a worrying thing from franchising, but at the same time, that’s also small business broadly. That happens every day in small business, not just in franchising.
So, I think franchising is at a tough moment, but I think it’s a correction that franchising really needed to have at this stage in its life cycle. Because, my view of it is, it’s not a franchising issue per se that we’re having right now with parliamentary inquiries and stories of people losing houses and so on as a result of it.
I think, and this will spin off no doubt as it always does when we chat, Brian, that I think the issues facing franchising right now are facing every small business operating in Australia and around the world, and I think most of these issues are primarily issues around consumption.
They’re consumption because everything you and I consume on a daily basis has fundamentally changed from what it was 10 years ago. We now consume more than pizza delivered to our home. We can get any food delivered to our home.
We buy so much online, we don’t even need to leave the house. We price check online and then we go to a shopping center and try clothes on and then buy them online. There are so many things happening with consumption through the economy that is knowingly affecting the high profile franchise sector. As it always is, it’ll become a great target for people when it’s so high profile.
That consumption change is affecting, really, where the heart of franchising is, especially in food franchises. When you see things like shopping centers with undeniable traffic counts down, spending down, that of course is going to affect franchising business models first and foremost straight away.
So, to wrap up that answer is that, what’s happening in franchising, it’s needed, it’s a correction. That was always going to happen. I think franchising will come out stronger. I think franchisors right now have … I think broadly, the franchising sector missed a number of shots across the bow a number of years ago, when we had wage scandals.
I think that was a sign that things were really becoming under distress and no one really took any serious action in my view. So, I think we missed an opportunity there, and now franchising really has a PR problem. That’s what worries me. Franchising has a PR problem, and it’s, in many ways, of our own making.
So, I think we’ve got a lot of work to do in franchising, and that’s the state of franchising right now, is that we’ve got a lot of work to do to fix the PR issue in franchising.
Brian Keen: I agree with you. I haven’t heard those words expressed before, but I agree with you and I like your Paul Keating moment. Because, I think it’s a cycle, just like we see in the building development market, like we see at the stock exchange. And when that happens, there’s a shakeout, and the rebuild is absolutely giving opportunity.
Brian Keen: So, for people that are on the ball, and if you’re not on the ball in any sort of business, your days are numbered, there is an opportunity for disruption because franchising, the great thing about franchising, my belief, is you can respond very quickly. Innovation and speed.
Brian Keen: So, it’s not my interview. Let me carry on.
Insight: Franchisors cannot rely on having a model where selling franchises is crucial or the primary way to generating more income.
Click HERE to Go to – 8 min 36 secs into recording
Brian Keen: Let me ask you a second question. So, can you tell me about your philosophy for the three speed franchise recruitment, how you see the market now?
Glenn Walford: Yeah. I think I should preface that with that I think we’ve always talked in franchising, or everyone you talk to in franchising has a throwaway line, that a franchising business exists and only can be successful on selling more locations and growing more franchises. I used to parrot that out like everyone, and I’ve said it before in books or magazines or whatever.
I don’t necessarily believe that anymore, and I think to go forward in the modern world, in the modern economy and in modern franchising, which I think is going to be more of a hybrid franchising type model going forward, is that franchising can’t just exist and function on selling more locations, because that …
It’s almost why the problems exist now in franchising. If your sole way you make money is by selling more locations, then it effectively means that the business model that underpins and is supposed to make those locations sell has a weakness inherently in it.
I think franchisors need to, as much as anything, yes, be trying to grow and selling new locations, but also be looking at how else can they generate revenue or where else can they generate income for themselves and for their franchisees at the existing locations they have. How can they leverage what they’ve got for more income? I don’t think this whole thing about franchising is only going to live and die by selling more units. I think that’s how we’ve got into trouble as we are right now.
I think franchisors with this endless desire for growth in probably stretching unit numbers and territory numbers in a country like Australia with only 23/24 million, I think a few of them have stretched a bit too far. Just because there’s a new shopping center down the road, doesn’t mean you have to be in it. I prefaced that question with regarding to my three speed franchise recruitment.
So, I want to know what your thoughts are on that, Brian, I think there’s some issues there.
Brian Keen: Yeah. I mean, there’s been casualties in the past. Some of them fatal, as you say, where people have just tried to continually recruit new franchises and not looked after their existing model. Often that’s because they haven’t had the communication plans in place, they haven’t allowed adequate ongoing royalty fees to go to support the cost of supporting franchisees.
Brian Keen: One of the best examples I’ve got, it’s a company that I was involved in founding way back in the early 90s called Expense Reduction Analysts. One of my business partners, John Anderson, took it to the UK. They’ve grown there to 150 franchisees doing their business consulting, and they’ve rounded off, and for the last two years they’ve not sold a single franchise because all they’re doing is adding value, adding products, adding services, training and improving the quality of everybody they’ve got.
Glenn Walford: Excellent.
Brian Keen: That’s giving them a fantastic revenue. So, it’s getting the business model so that overall growth doesn’t mean store growth, as you were saying. So, I think that’s a very relevant point for people to remember.
Glenn Walford: It’s crucially important that for people in your network, for example, who are, “Oh, I’ve got to sell more franchises. I’ve got to sell more franchises,” my thinking is, even to clients that we assist through Franchise Buyer, which lives and dies by franchisors spending money on advertising for finding new franchisees, to consolidate.
Go three or four a year. Focus (new opens) in this location, get that right, then move on.
This whole “we’ve got to grow really fast to fill the market”, that’s how a number of people have got in trouble. Really, the people who are left, that get left carrying the can, the individual mums and dads who own houses and put their money on it. They’re the ones who get left carrying the can mostly. So, that’s my thinking on that growth.
Insight: The philosophy of the Three-Speed Franchise Recruitment Market
Click HERE to Go to – 12 min 4 secs into recording
Glenn Walford: I think, and I’ll probably steal my thunder here … So, I’ll jump into where I see the three speed franchise recruitment market. There’s three speeds I identified, and I think it’s becoming very clear.
The first speed is that some brands will shelve their growth plans going forward and instead focus on reinvesting back into their existing network, which is exactly what you were just talking about then with Expense Reduction Analysis.
Their focus is to grow profitability and revenue in existing franchises as an alternative way to grow their income and secure their brand for the future. So, it’s a consolidation phase. Because, for example, if they’ve got a royalty or a business model that if they increase sales in their franchises, then focusing on increasing those sales will of course drive more income for the franchisor.
Looking at ways to do that. That’s the first speed. They’ll still add franchises when the opportunity presents in a natural course, but not aggressively chase it.
Second speed, or the second type of franchisors I see in recruitment going forward are, some brands will acknowledge the challenges that are out there right now, but continue their focused expansion plans, and they’re confident that their business model is solid, attractive and stands above any broader market sentiment on franchising like we’ve spoken about, any negative sentiment.
They’re also able to articulate and present their value proposition. That’s crucially important. They’ve got a really good handle on what their business is and how it meets the needs of the business opportunities seeking market and they’re able to articulate that back to the marketplace. That’s the second type of franchisor, the second speed.
The third speed is the one you don’t want to be on. It’s that other brands, no matter what they do or how much marketing money they throw at expansion of their network with new franchises, they just won’t be able to sell enough units.
Their offer, when more closely scrutinized in this environment by savvy buyers, just does not stack up as good value or giving a good return for the future. It’s not future proofed. They’re the brands that I see in serious trouble, and they’re the existing franchisees that I see in serious trouble, because re-sale for those existing franchisees in those types of businesses are going to be extremely difficult.
What will it take to grow a franchise system moving forward?
Click HERE to Go to – 14 min into recording
Brian Keen: That’s a very perceptive view and very succinct, Glenn. Thank you for that. So, we’ve touched a little bit on this, so we’ll be sort of, I suppose, going over a little bit of what we’ve discussed in our general bits of conversation, but keeping it in sequence, what do you think it’s going to take to grow a franchise moving forward?
Glenn Walford: I think it’s figuring out which of those three speed you’re in and being honest with yourself to start with, as a franchisor. A franchisor… I mentioned earlier a line in there about just throwing more money at it, and once again, it was to my benefit previously in my business in Franchise Buyer to just encourage franchisors to just keep throwing more email marketing at our database or more magazines and everything and the like …
It’s going to be irrelevant how much money all these brands throw at recruitment marketing and spend if they’re not honest with themselves on where they sit in the marketplace. The trouble is, if not there (in difficulty), it’s going to be very shortly around the corner.
So, I think to grow in the current marketplace, franchisors are going to have to be very, very honest with themselves, sit down and really scrutinize their business model, and have a look and really think about in the cold light of day how attractive they are to business opportunity seekers. We can’t brush over any cracks anymore.
We know, as disruption starts to happen, the market conditions become tougher. The cracks that might have been smoothed over when everything was running along, the economy was running fine several years ago and everyone was happy, they can be smoothed over when people are making money, but when the fundamentals of the business models are not there and the business model is not future proofed and there’s so many other alternatives out there, then that model itself needs to be disrupted by the franchisor, and if it’s not disrupted, then everyone’s in a whole lot of trouble in those businesses.
Brian Keen: So, we’re talking about generational change literally, aren’t we?
Brian Keen: It’s whether it’s the same old head or a new young head, it’s really lifting the game and reinventing the wheel.
Glenn Walford: Yeah, absolutely. It’s very easy for me to say, “You need to do this, you need to do that,” but it’s just what I see in the marketplace. If you’re not prepared to almost gut your model and figure out how we have to re-engineer this model to make sure it’s seriously profitable, if you’re not thinking how is the business opportunity seeker considering my business as an investment, then you’re going to be in trouble if you’re not already.
How have you seen the way brands attract franchise partners (recruitment) change over the years?
Click HERE to Go to – 16 min 20 secs into the recording
Brian Keen: Okay. So, when we look at that then, coming over to your side of the ledger, attracting franchise prospects, how have you seen that change over your time in franchising? So, way beyond the life of Franchise Buyer, but back in your earlier days with Zarraffa’s, which for those listening, is a predominantly southeast Queensland based coffee chain. Very, very successful.
Glenn Walford: 100 or so stores now.
Brian Keen: Yeah. Glenn was involved in, I suppose in its sort of more embryonic earlier days, when it was growing, yeah. So, it would have been exciting times. How has that recruitment changed over that time?
Glenn Walford: Yeah. I mean, my Zarraffa’s days was the early 2000s, so I think I was there 2002 to 2004/2005. We went from 4 to 12 or 13 stores at that time, so it was really starting to move.
Then my Retail Food Group time after that was … I think I actually left, Brian, the week they listed on the ASX. That was the week I left that business. At the time there was no particular reason, but it just happened to line up with that.
But, I think, previously, in those times, it was … You put an ad in the newspaper. It was really only a couple of channels you’d go to find people who wanted to buy a business or had interest in buying a franchise, and it was very, very easy to know where to go. Because, part of the problem is not only articulating the message, but knowing where to put it.
That was the issue. So, it was really quite easy. Presenting a business opportunity in a newspaper, a quarter page ad or eighth of a page or whatever, people forget, but it was like three grand, even in The Courier-Mail up here in Brisbane. It was like $3000 for a little spot there in the corner there on a Saturday, and then you’d just wait for the phone to start ringing.
It was a very, very different market, and I think some people have struggled to adapt since that time. We were still doing that as recent … That was still happening for us as recent as 2008/2009 when I was at Lenard’s, looking after that region there.
Put an ad in the paper and wait for the phone to ring on Saturday mornings and Mondays and you’d be away, and you’d have 30/40 people to talk to about buying a franchise. That would cost you three or four thousand dollars, and people forget what that would be, when you do that every second weekend or something.
So, now, as far as what it’s going to take growing franchises forward, it’s really more about getting your head around what are going to be the most effective channels for you to reach the people you’re trying to reach. First of all, you’ve got to start by identifying exactly who you’re trying to target.
A lot of brands that I’m talking to, and over the years, have rarely identified it, is that they really haven’t identified exactly who they’re after. So, if you’re not, once again, ruthless with yourself as a franchisor, and say ‘I’ve got to decide who exactly is the best fit for my business’, and then go after that person …
That, in essence, is my advice going forward for any franchisor. Find out exactly who’s perfect for you, find out where to find them, and then find out what messaging you need to deliver to them to open the lines of communication with them. That’s what it’s going to take to grow a franchise going forward.
Brian Keen: I think so. One has to look, I think, as a franchisor, at recruitment as an investment, not as a sale.
Brian Keen: Because that is going to be your footprint in that area, whatever the trade or industry or service might be, and they are the people that are going to be your investment, your plant and equipment, literally, that you need to make sure is the most efficient. So, that’s an interesting way of looking at it. So, where do you see…
Glenn Walford: Can I just go on one point there?
Brian Keen: Yeah.
Glenn Walford: I think … I’m going to sort of check back on that, about growing your franchise going forward. I don’t see it anymore … And this is where this Magnetic Franchising business has come out of Franchise Buyer. I always had a passion for helping franchisors a lot deeper as far as their recruitment messaging and marketing goes, to the point where from my operational and marketing experience background in franchising, I’d start to get too involved in the messaging for brands in their recruitment.
Because I’d see holes in it and say, “We could do this, we could do that,” and it ended up that I’d just become a really cheap consultant, because I was consulting on recruitment marketing while at the same time had the advertising platform to send it out to, to find leads for.
Insight: A holistic approach to assessing and doing something about making your franchise attractive to opportunity seekers is required going forward – if you want to grow.
Click HERE to Go to – 20min 22 secs into the recording
Glenn Walford: So, what really came of it was that … I think franchising going forward and recruitment of franchisees, and the marketing of that going forward, is no longer just marketing messaging. It’s actually, it’s a holistic business approach.
That’s why I talk about disruption of your system and being ruthless with your franchise system. You need to look at your system now, and your whole business model, with the lens over it as if it’s being assessed by a business opportunity seeker. Because there are that many opportunities out there that people could choose, and they will just skim straight over the top of you if the features aren’t hitting them or hitting their hot buttons. That’s why it’s important to find exactly who fits your system and who you’re looking for and articulate a message to them.
I’ve been saying it for years, since, Brian, you and I had our internet marketing days and everything, where we first met, is that the competitors for franchisors, for prospects, for franchisees, are not just other franchise businesses.
The competitors now, even more so, are MLM businesses with no money down. You can now access a marketplace of … How many is Facebook? 2.2 billion people globally. You can now, for no money down, start your own MLM business and start accessing all these people, just figuring out how to do it yourself, and start your own little business. Yes, not a lot of people might want to do MLM, but there’s a lot of people who are more than happy to do multi-level marketing, and they don’t have to buy into it.
So, there’s business opportunities in all different guises that are effectively competitors to franchise businesses. So, finding the strengths within a franchise business opportunity is where franchisors need to start, and they need to start by disrupting their system to make sure that they’ve built a system that has inherent strengths in it that are easy to articulate.
Brian Keen: That, again, is perceptive. I agree with you, without wishing to sound boring, because I think that is the space. It’s interesting to see the leaders out there doing often quite dramatic changes in the way they run their business. I mean, McDonald’s, as we speak, are just launching a brand new design, quite revolutionary, will cost them a fortune.
That’s what they have to do to stay in the market, and they know they need to do that refreshing every so many years. You have to keep up there, so you have to make provision for extra capital expenditure. Yeah.
Glenn Walford: This is the challenge, and this is why I’m loving what Greg Nathan is doing at the moment in franchising. He’s calling it positive franchising, which I don’t necessarily love because it means that everything else was negative, but I see the concept behind it, what he’s talking about, and it’s brilliant stuff.
I think the challenge with franchising going forward is not just articulating the message there, but it’s building a model, a business model for franchising, for your own franchise, as a franchisor, that has a deep enough engagement in relationships with franchisees of trust in you, that you know where you’re going and you know where this business needs to go.
It was sort of always the case, and we’d always talk about it, but I thought it was often used as a throwaway line, about franchisees and their relationship is the most important, because I never saw a hell of a lot of investment in that in many ways, and certainly not walking the talk.
So, really, for franchisees, franchising’s innovative at the start and it’s creative and it can move really fast … In some ways, I’m of the opposite view. I think franchising moves really slow. I think franchisors generally are hugely conservative, in my view, from what I’ve seen in the way they approach things, and I think it’s inherent in the franchise business model.
Insight: A fundamental issue in franchising and mature franchisors toward change in their systems.
Click HERE to Go to – 23min 50 secs
Glenn Walford: The reason for that is because I see the frustration in mature franchisors and veteran franchise executives, that they’ve been beaten down over the years in trying to sell what they believe and they know is a really good change and a really good message that this system needs, and getting fought back and beaten back by franchisees who are only focused on their own little territory, which of course they will be.
They’re only focused on their own little spot and how that impacts on them, and that they need to pay $5000 for that new sign, they need to pay this for that. Why should I do that, what’s it going to do for me, even though the system needs it.
So, franchising actually has an issue, fundamental issue, that makes it a little bit weaker as far as disrupting the business models go, because engagement and getting franchisees on-board to allow it to happen, to take the system where it needs to go to be future proofed, is a serious challenge I think facing franchising into the future.
Brian Keen: Yeah. There’s a case study I might just indulge in sharing, that about three years ago Hire A Hubby, long established building services, home handyman type business, the owners of the business realized that the people on the ground were actually doing jobs way beyond what was initially envisaged, not just rehanging a door, fixing a kitchen cupboard.
They needed a new marketing plan and so forth. They invested very heavily in new marketing plans, new model, new logos, everything else, and the franchisees actually resisted it. But, after 12 months, they found their growth was dramatic, double digit. That is the type of example … I think that’s a case study. You may have others as well, I suspect.
Who is doing it well at the moment that you have seen?
Click HERE to Go to – 25min 25 secs into the recording
Brian Keen: I mean, who would you say at the moment was someone out there that you would look at, that you say they are doing it right? Do you feel there’s someone you could share?
Glenn Walford: Well, it’s challenging, you know, because the hard thing about … You’re probably closer to the brands that you work with than I am, and in the Franchise Buyer stuff I’ve done previously, which is the majority of time with brands, is the engagement is quite superficial, is that I don’t get to see under the hood.
I get a lot of the marketing collateral, this is what we’re doing, and I don’t get the opportunity to engage and say, “So, tell me, are you actually doing that? How is that playing on the ground? How does that play out? What are you doing?”
We don’t go there, so that was always a little bit boring in some cases for me, ’cause I like to get under the hood and figure out, all right, why is it doing what it is. So, as far as knowing who’s disrupting and who’s doing stuff that’s so innovating and so creative, no one just immediately jumps out at me because I don’t feel comfortable to say, “Yeah, I can 100% back that. These guys are doing that.”
Because, I don’t know. I don’t know on the ground … ‘Cause, really, in many ways, the only person who really matters is the franchisee at the ground level. Think of what’s going on. A number of them, not an individual one.
I suppose one that does come to mind is someone like Fifo Capital, which is a company we’ve worked with off and on for a number of years in the micro-finance space. They’re always looking for new finance products to leverage their network and allow their franchisees to leverage their client base with new and innovative finance products to offer and sell through to their own clients.
So, that’s someone that I was just speaking to that comes to mind about taking a total new approach and changing the products in the business and repositioning it and future proofing. No one’s really talking that type of stuff to me. They’re pretty much the main one who’s been talking it.
The ones who are talking of disruption at the moment are mainly talking about disrupting their own approach to the way that they build their relationships with their franchisees, which I think is equally as important as product and innovation as far as product offer goes.
Brian Keen: Yeah. Actually, that makes sense. I’m someone who’s given the opportunity to see more of the innovation because I’m working with people who are new in the market, so these are the guys that … The National Drones and the Earworx, these people who come up with new ideas, new concepts, new ways of delivering products and sell them. So, they can launch themselves in the market far easier than an existing business can change direction in many respects. Okay. Interesting.
Insight: 5 things prospects and franchisors need to consider to determine if a franchise is on-track, and future-proofed.
Click HERE to Go to – 27min 48secs into the recording
Glenn Walford: One thing I would like to go over is I came up with a bit of a list of the ways that I think prospects can identify a franchise that’s going places as far as future proofing or on trend, or someone that you want to be involved in. So, I did it in our recent cover story for our Franchise Buyer Magazine, so I wouldn’t mind sharing those if you like. It’s my advice, essentially, to prospects on how they can find one.
Number one is be a franchisor who’s not afraid to disrupt their model with a clear view to sustainability and profitability. Some of these things can be uncomfortable for business owners, but this is what I think you should be striving for or wanting in a franchisor.
Number two, a franchisor who is actually adding value and can articulate and show this value. ‘Cause we talk about, “Oh, we do field support. Oh, we do marketing,” well, okay, that’s fine. Show me the value and show me how you’re adding the value, exactly how. We’re going to have to get a lot better at that. These throwaway lines of, “Oh, we do this and we do this support, and we coach,” well, tell us how that happens.
Three, a franchisor with a plan and a method to explain their approach, especially territory planning, location planning. I think transparency as a franchisor is going to be absolutely critical going forward. It always was, but we were able to brush over it. Transparency. Don’t be afraid to tell them what you’re thinking. 100%.
Number four. A franchisor who has a clear understanding of where they fit in their market for the consumer and against their competing brands. Super important. I mean, consumers obviously because that’s the end product that the franchisees are trying to make an income off at the ground level, but also as equally important is the competing brands in the marketplace.
‘Cause if you don’t understand the competing brands in the marketplace that you’re selling against as a franchisor, then they start to put territories or locations and stores right beside your existing franchisees and are positioned well and truly above you. So, that can make it difficult for your franchisees.
Number five, a franchisor who demonstrates strong, fair and decisive leadership. That’s a really hard thing to do at times. But, way, way back in it feels like another life, I’m ex-army, and we talk about decisive leadership and making decisions that are unpopular, but you have the vision and the reason and all that sort of stuff behind it.
I think mature brands at times, I think, can sometimes get a bit beaten down over the years of working in the system, and we’ve talked about disruption, Brian, that’s where the decisive leadership must come into play. Have that vision, be very clear on the methodology and approach, and you’re just going to have to back yourself and drive it through.
Brian Keen: It’s not as if this is a new phenomena. We’re seeing it particularly with online. It happened with the printing press in the 15th century, and things don’t change. All right. Thank you for that. That’s something that our listeners, as franchisors or perspective franchisors, need to be able to respond honestly. They give themselves a 10 out of 10 on each of those five points, so that’s something to listen to again and transcribe to everybody, I think.
So, you perhaps touched a bit on it already, so maybe this question’s been addressed, but where do you see franchisors getting it wrong primarily?
Where are franchisors getting it wrong in franchise recruitment?
Click HERE to Go to – 30min 48secs into the recording
Glenn Walford: I think they’re getting it wrong, from a recruitment perspective, it’s the articulation of their message to the market. The majority of the time that we do work with brands, no matter what the size of the brand, it could be the biggest with six, seven, eight hundred stores, or we do it with the actual start-up, is the articulation, everyone tries to generally or they get caught around a consumer related marketing message to a business opportunity investor, and it doesn’t work.
The amount of times that I would get burger or pizza or coffee brands, who have hundreds of locations across Australia, send me to do our EDM to our 30,000 database of prospects material and really haven’t focused on the product, the end product. The end product is entirely irrelevant. With a business of that size, people know the brand. They’re aware of what the brand is.
What people are after, if they’re going to respond, and to get quality applicants, is it’s articulating what the opportunity seeker or the investor, what’s important to them about that business. Not that it does pizza or great coffee, that’s a part of it. They’re the foundational supporting things. But, it’s really trying to drill down and find those three, four, five things that really can be very quickly articulated.
That’s been an age old problem I’ve found in the entire time I’ve been running Franchise Buyer for, 7 years.
Brian Keen: It’s lazy advertising, you know?
Glenn Walford: Very much so.
Brian Keen: Use what sells cups of coffee, but it’s not going to attract investors.
Glenn Walford: On that as well, the ones that I’ve found most challenging to work with are advertising agencies. I’m telling you, whoever is listening to this have absolutely zero idea of franchise business opportunity recruitment marketing. Some of the biggest advertising agencies in the world with networks here in Australia, and based in Singapore and whatever that I have to deal with, at times I just wouldn’t want to renew them because they were so difficult to work with on the basis of sending stuff to us and expecting a result, to send out to a database of business opportunity seekers that has, from a copywriting perspective, for business opportunity seekers was so far off the mark, I cannot tell you.
I think about, wow, what retainer are these guys paid to produce results here.
That’s been probably the most astounding thing that I’ve been exposed to in time in doing what I do, is how much money must be wasted and opportunity lost from brands who are outsourcing their franchise recruitment marketing to advertising agencies who have zero idea what they’re doing about franchise recruitment.
Brian Keen: Thanks, Glenn. Now, I think in our conversation, again, we’ve probably … I have some questions lined up here, and I think we’ve probably addressed this one, but you may want to add a little bit to it, was how can franchisors improve their franchise recruitment performance and attract more quality prospects?
How can franchisors improve their recruitment performance?
Click HERE to Go to – 33min 26 secs into the recording
Glenn Walford: It’s probably good to go back over it though. I think the number one thing is, number one, understanding exactly who they want, which is who fits their business best. So, really, really … And this is what we’re starting to do in Magnetic Franchising, the other part to the business, is working with franchisors and doing workshops with them, and saying, “Let’s bounce it around. Let’s figure out …
Tell me about your best franchisees. Who are they? Why are they great? How did you find them? Where did they come from?” And really, really digging deep on this.
Really, it’s ideal as a third party to do that because there is a lot of vested interests within business, and people don’t even know when they’re being biased often, when they’ve been within a business.
Brian Keen: Mm-hmm (yes).
Insight: A recruitment marketing budget, adapted to an advertising / promotion spend, is NOT a franchise recruitment strategy. Many franchisors are trying expand with simply having an advertising schedule trying or pretending it is a Recruitment Strategy.
Click HERE to Go to – 34min 07secs into the recording
Glenn Walford: So, really understanding that is absolutely crucial, because if you don’t really understand that, how do you produce a marketing plan with a marketing budget and a strategy to go after it? I see franchisors really without a recruitment strategy. That’s probably the biggest thing, is there is always a recruitment budget, but there’s not necessarily a recruitment strategy to go with it.
A strategy is not, oh, we’re going to do some advertising in Franchising Magazine, Franchise Buyer or on SEEK business. That’s not a strategy. They’re distribution channels.
They’re portals, and lead generation is where there’s prospects, but the strategy is who are you after, what message are you going to send to them, in what format, video, podcast, content, written, imagery. There’s all these things that need to come together and be in sync. Then you have to add in all the other things like social and digital and so on.
So, there’s all of this sort of stuff that comes together, and we’re finding with many brands we’re talking to in depth in our workshops, is that there simply isn’t a franchise recruitment strategy in place.
Brian Keen: It makes a lot of sense. Makes a lot of sense. So, you’re a disrupter in the space. You’ve launched new magazines. You’ve gone forward now with Magnetic Franchising, which is an amazing concept I think. So, what are you doing? Can you describe for the listeners what you’re doing that is different in your approach? What’s outside the norm, outside the box?
You are a disrupter in the franchise recruitment marketing space, what are doing now?
Click HERE to Go to – 35min 35secs into the recording
Glenn Walford: Sure. I’ve seen from the … I think Joe Matthews in the US. I love reading his stuff. I love watching what’s going on in the US as well, and I have been reading stuff for many years about the portals and classifieds really dipping in performance in the US from a lead generation perspective.
It totally makes sense. We were seeing it. Open rates dropping for prospects from email marketing and so on. It all still works, but it’s all part of a marketing mix.
Insight: Moving to a Pay Per Lead Model component for franchise recruitment.
Click HERE to Go to – 35min 58secs into the recording
Glenn Walford: So, what I’m seeing happening and what we’ve done with Franchise Buyer is, we’ve really started to shift Franchise Buyer to focusing, walking the talk as well. We’ve focused in on exactly where we fit in the market and exactly the type of person we’re trying to work with and we’re trying to chase.
So, we’ve shifted Franchise Buyer to a pay per lead model, which is uncommon for our type of platform at this stage, but I think where it needs to go. Because, if you think about it, from a franchise recruitment disruption perspective, the biggest disruption in franchise recruitment really has been Google and Facebook and LinkedIn.
I’ve identified that the competitors to the marketing spend with franchisors, for my businesses, for both Magnetic and also Franchise Buyer, are really SEO firms, Google, with pay per click through AdWords, and Facebook and LinkedIn.
They’re the ones taking the marketing budget, looking for franchise recruitment prospects. But, the challenge with throwing marketing budget at that, doesn’t mean it’s going to actually perform any better, because the biggest problem then franchisors have then is content, is articulating content, and that all comes back to are you targeting the right person.
So, it all revolves around in a big circle. The disruption that I’m sort of doing in my business at the moment is in moving it to pay per lead rather than doing full packages of you send an email blast out, this is how much it costs you, or you send something to our database and it costs you X.
I’m more interested in you send something to the database and you get results and success, it costs you this much per result. That’s the model that we’re doing. I think the franchise portals and the traditional franchise arms will get to that over time, but I think it’ll still take a few more years.
So, basically, you know, Brian, I always like to lead the way, even to my own detriment at times, but I think that’s where it needs to go.
Brian Keen: You have to do it. Yeah, look, you’ve got to be brave, you’ve got to accept change, you’ve got to find it exciting. You know you’re up against a brick wall occasionally, but if you don’t scale that wall, you’re not going to get there. That’s one of the challenges and one of the pleasures of being in business, and life really. We won’t go into philosophy too much…
Glenn Walford: Otherwise it’s pretty boring. I think the … I mean, what it does to my business, to my Franchise Buyer business, the modelling really, it drops revenue by 50% in year one, which is always scary, but it’s about future proofing and it’s about where the market goes. Because, it doesn’t matter what I want or what model I want to present people, it matters what the market wants or is prepared to pay for.
Insight: Focusing on engagement with prospects at a deep level to help them find and match them with the best that will fit them best.
Click HERE to Go to – 38mins 22secs into the recording
Glenn Walford: I’m always thinking of the prospect rather than the franchisor, and we’re trying to engage more with the prospect as opposed to the franchisor, ’cause if we’re engaging well with prospects, that means we’re finding the right people and we’re matching the right people to the right opportunities, which is where I also think the market’s going to be at, which is matching people to businesses and being more of the independent advisor, helping people find the business that matches them best.
That will help franchisors, that will help prospects, and that will help franchisees be more profitable when they get into the business. That’s good for franchising and business overall.
Brian Keen: Absolutely. This is where leadership keeps coming in all the time. If you’re going to be a successful franchisor, you’ve got to lead and you’ve got to maintain that positivity because your franchisees go through times of ups and downs, you can’t control peoples’ appetites and you can’t control elements of how many cars are on the road.
So, you’ve got to maintain that positivity, and that’s really hard. That’s why every franchisor needs a good team around them, a team of experts across the field. Often third party, not related directly to the company. No vested interests, but there to actually help innovate, help support, encourage and motivate.
Glenn Walford: And you’re right, and that’s what we’re doing. I mean, the disruption we’re doing to our Franchise Buyer arm of our business, which is primarily lead generation, digital magazine and one single print magazine a year now, is that we’ve really figured out that’s the role it plays in the market, it’s connecting buyers to sellers effectively.
Sellers are franchisors looking for buyers. So, if we do that really well and engage with those prospects, or buyers, really well, give them great information and help them be successful in their business, then it’s a good match for all.
And coming off that is the Magnetic Franchising arm, which is where we start to work very, very closely at a much higher level with franchise brands, and effectively become a dedicated franchise recruitment specialist marketing team.
With all the experience we have, effectively with board level input, but also we do all implementation of all the strategies, all the content, all the video, all the lead generation, to the point where you wouldn’t believe it, Brian, I now talk to all my, what would have been, I now call ex-competitors to Franchise Buyer in the marketplace and I buy advertising from them for our clients through Magnetic.
So, I think that’s the disruption that’s there. It’s about seeing the whole marketplace in its entirety, in a holistic perspective, knowing that franchisors just need results, performance, and making that as cost effective and as high returning as possible with a really good return on investment, which is what we’re all about.
But, positioning them well for the future and allowing them to be focusing on their core competencies, which is their system, as opposed to trying to figure out how the hell to make the most out of a pay per click strategy, which is not … Not all these franchisors have got the resources to have a social person, to have a designer, to have a person in email marketing. It’s just not possible.
So, we’re trying to get a really broad thing, with all our skills, and bring to the fore for those two models of Franchise Buyer and Magnetic Franchising to help franchisors grow and prospects find the business that fits them best.
Brian Keen: It’s exciting, Glenn, and that’s why I’m talking to you, ’cause I think that definitely you’ve unearthed the way to the future, that flow. So, you generously agreed to my request that you would make an offer to the listeners. Perhaps could you just iterate that to us now?
Glenn Walford: Yeah. It’s a very straightforward one. Because this is obviously, it could be listened to at any time into the future, ’cause I know this is 81 or 82 in your series, so there’s some life there …
So, really, the best thing to do is, from an offer perspective, is we’ll also always have free information and e-books and materials and everything on both of our websites. But, they can go to franchisebuyer.com.au or magneticfranchising.com.au at any time and download the assets we have on there, which are really just designed to inform and assist.
If you want more information, you can go from there. There’s no special sell offers or anything like that, we just like giving away information. If you like the information and you enjoyed listening, then no doubt we’ll open up a line of communication at some stage.
Brian Keen: Excellent. Glenn, thank you. It’s been delightful talking to you. I always enjoy your energy and there’s always a few curve balls come in, which is fantastic. That’s why we’re here. That’s why we do what we do, and that’s why we enjoy what we do. So, we’re all indebted to you for giving us so much time today. I know with your launch of your new products and so on, you’re incredibly busy, so I appreciate that.
I’m sure everybody will join with me saying it’s been a privilege having the opportunity to get to know you, Glenn Walford, a little bit more, hearing your words of wisdom, and we’ll leave it from there. I will leave the information with the radio show. If anybody does want to get in touch or overlooks the addresses, you can always contact me at brian@franchisesimply.com.au. Give me a call, you’ve got my number, and we’ll go from there.
So, basically, in closing, thanks again, Glenn. This is Brian Keen from Franchise Simply signing off.
Glenn Walford: Yeah, thanks for your time, Brian.
Brian Keen: That’s a pleasure. And looking forward to being with you when we interview our next Franchise Radio Show guest.
Article Source: Franchise Buyer