As a business owner in the beginning stages of starting a franchise, how do you know when to outsource franchise development? Do you have a few locations and you want to focus your time and energy on your current franchisees? Do you have a quality regional developer? In this episode of Franchise secrets, we chat with Ryan Zink about your options: to outsource or not.
Ryan Zink had his start in the franchise industry with General Nutrition Center (GNC). After he grew his territory to be among the highest in revenue production in the county, he switched gears. He became a supplier for GNC working with NDS Nutritional Products. In 2005 he co-founded Complete Nutrition—which grew to over 200 locations in just 5 years. Listen to the podcast as we talk about his newest business venture, Franchise Fastlane, a Franchise Sales Organization (FSO).
As an emerging franchisor, the process of franchise development can seem daunting. Maybe you don’t have a regional developer in place that can help build out your franchise. Or the expansion you’re looking for just isn’t happening. But the number #1 reason we see franchisors looking to outsource development is that their passion lies in supporting and building relationships with their current franchisees. And you know what? This is 100% how it should be.
When you invest in training and relationships with your existing franchisees you have a greater return on your investment. This is where Franchise Fastlane would come in as an FSO. The company acts as an extension of you. They would do the research and the work to find you quality franchisees to help take your company to the next level. Listen on as Ryan and I discuss franchise development and his passion behind founding Franchise Fastlane.
There are very few people who actually enjoy the development process—you have to be built for it. Your biggest challenge when diving in is deciding on what kind of growth you’re looking for. The biggest con may be that you have to be primed for the rapid growth of your business. If you just aren’t ready for that, odds are an FSO may not be the best fit for you. Ryan recommends, instead, to start with your close friends and family who trust you and your business model.
They can be the early pioneers that test your process and validate that it can be profitable.
You have to consider that there are a lot of risks that have to be assessed for those buying into a new franchise. Your brand isn’t recognizable yet, so are they going to have to invest in marketing? Will they recoup their additional investment in infrastructure? All of these things can make it difficult for you to recruit franchisees. But if you have a great system in place and are ready for growth—but just don't have the sales force to do it—definitely consider outsourcing your growth. Keep listening as we talk about the options in-depth.
If you’ve already established that you are ready to roll out nationwide, you’d take the next step. The franchise consultant or sales organization will thoroughly vet your company to make sure they can actually help you. They look for things such as sufficient experience in franchising and if you can monetarily support the onboarding franchisees. Ryan’s team would then spend ample time with your current franchisees. They want to know if progress is being made with your franchise.
They will cover every inch of your business model. They will learn the ins and outs, the good and the bad, and where attention may be needed. A FSO also needs to understand the time commitment a franchisee would be making as well as profit expectations and whether or not those were met. If you don’t have set processes and practices in place, you may need to go back to the drawing board and get a better plan in place. Remember, they have to not only be able to pitch your franchise to a candidate, but also find the best fit for your team culture. Continue listening as Ryan and I discuss what systems they’re looking for and types of businesses they would lean towards working with.
If you’re an entrepreneur hoping to buy into a franchise, what would be the benefit of going through an FSO? While many people prefer to go directly through a franchise, you need to remember this: 60% of inquiries about a franchise opportunity go unanswered. An FSO or consultant is vested in the franchise they’re working for, but also passionate about finding great franchisees. You will get the time and attention you deserve from us, guaranteed.
We are doing the exact same job a regional developer with a franchise would be doing but not directly working within the franchise. Keep in mind that we’ve also already done all of the hard work up front—we know if this is a good organization for you to buy into. We’ve thoroughly vetted them, understand their company culture, and are uniquely positioned to be a resource for the franchisor and prospective franchisee. It isn’t just about the money. We also want to get to know you, who you are, what your experience is, and how involved you want to be. Keep listening to the rest of the podcast as we talk about more things you’d like to know—and the best business decision Ryan’s ever made.