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The iFranchise Group (www.ifranchisegroup.com), a leading franchise consulting firm based near Chicago, is confident that franchise agreements will continue to be signed at increased rates this year and beyond, even with ongoing challenges still facing most franchisors. The company believes that the successful sale of franchises, however, will depend on franchisors being able to intelligently leverage available financial tools, existing and emerging technologies, and, of course, human resources to their best advantage.
Financial Tools for the Franchise Sales Process.
Though lending conditions have been gradually improving, franchisors, just as any other businesses, are still feeling the effects of tightened credit that has characterized business lending over the last few years. Franchisors are finding they need to actively assist their potential franchise buyers by exploring and even providing direct access to options beyond traditional bank loans.
“Non-traditional funding sources such as local credit unions and venture capital, along with SBA-backed lending, and even in-house financing are all playing important roles in achieving franchise sales. And as franchisors and franchisees learn to navigate the financial field and seek out financing alternatives, plus with credit loosening even more, we expect franchise sales to be up by 10% to 15% or so this year, and likely up 20% in 2012,” reports iFranchise Group CEO, Mark Siebert.
Other industry executives echo this sentiment. “It’s critical that franchisors do whatever they can to help ensure a franchise sale does not completely stall out in the final financing stage,” says Robert Stidham, President of Franchise Dynamics, a strategic partner of iFranchise Group which provides outsourced franchise sales services.
Using Technology in Franchise Sales.
Technology also continues to play an important role at every step in franchise sales. But savvy franchise industry insiders know that it is an ever-changing field; what may have been a failsafe way to sell franchises just a couple years ago may be obsolete today.
“Franchisors need to understand the importance of using every bit of current technology to their advantage when selling franchises. It’s no longer just a matter of promoting their concept online via their websites,” says Siebert. “Through our ongoing franchise consulting services, we constantly educate our clients that it’s all about using a variety of tailored online marketing and social media options to get the message in front of the right prospects. It’s about using communications technology, such as e-brochures and webinars, to drive a prospect from first inquiry through to the date of the franchise sale. And, it’s about continuing to use technology even after the franchise is sold, to assist with important functions like site selection, vendor relations, document delivery, and more.”
The Importance of People to Franchise Sales.
Industry experts also recognize that in franchise sales, people are often the most crucial ingredient. “The best results come from hiring the best people, giving them the right resources, and managing them for performance, effectively,” comments Stidham.
“I’ve been a franchise consultant for more than two decades, and I know that in the end, franchise sales are still all about building long-term personal relationships,” adds Siebert. “No matter how state-of-the-art the tools are, no matter how many pre-approved financiers a franchisor works with, if the sales staff is not properly motivated to identify and select the right candidates, and if candidates do not feel comfortable with the franchisor’s representative, deals will not get done.”
About iFranchise Group:
iFranchise Group (www.ifranchisegroup.com ), is a leading franchise consulting firm that offers the skills of the nation’s top professionals in franchise strategic planning, operations training and documentation, franchise marketing and sales, advertising fund management, franchise recruitment, and development of Internet-based applications for emerging and established franchise companies worldwide.