Franchise Sales Force

February 2010 Franchising World

The 2010 Annual Franchise Development Report has recently been released by Franchise Update Media Group. It highlights the latest trends and recruitment intelligence in franchising. Participants represented 38,800 units and plan to add 5,360 more franchise units through this year. This is the only sales and lead generation benchmark report available in the industry and features annual development results from up to 150 active franchise organizations.

According to Steve Olson, publisher, “Online ad portals and referrals continue to be the top sales producers, followed by brokers, print, franchise shows and PR. Search engine optimization is paying off, but be aware that pay-per-click typically produces the lowest return for online dollars invested. Also, don’t get excited about social media for recruitment, as franchisors are still generating very minimal sales. It’s working on the retail side, but we’re not there yet on the franchise sales side.”

The survey also reveals that over half of the respondents have reduced start-up costs in the past 12 months. Olson adds, “In response to current economic conditions, the initial investment requirements have experienced the biggest reduction, followed by lower franchise fees and royalties, as well as other cost reductions.” In addition, 65 percent of companies surveyed now provide referral incentives, a 71 percent increase over the 2009 report findings.

The AFDR research is designed to help franchisors save thousands of dollars in development costs. It provides benchmarks for particular industry categories, investment levels, and recruitment budgets; delivers marketing costs and sales compensation information; reports the top-producing sales and lead sources; reveals performance evaluations of franchise Web sites and follow-up to prospect inquiries; and analyzes current and historic industry growth trends.

“This year’s report shows that the smart franchise organizations are watching lead-generation and sales trends, making adjustments, and continuing to thrive even in this tough economy,” Olson said.