Internal or external; which franchise recruitment strategy is best?

By Nick Hall | 05 Jul 2019 View comments

How does your business recruit new franchisees? While there are a number of potential strategies on offer, franchise recruitment generally boils down to two options; internal or external.

Internal franchise recruitment refers to an in-house process of transitioning staff from store-management roles into franchise partners. Similarly, in this strategy, it is the responsibility of the franchising manager to oversee new partner growth.

While this is an effective way to control the entire process, it can be a time-consuming method. The alternative is outsourcing the recruitment process, seeking prospective partners from outside the network.

Brendan Green, CEO and founder of handyman franchise Hire a Hubby said that while many franchisors focused on generating leads, the focus should be on nurturing them, even those you may have previously ruled out.

Generating vs nurturing leads

Green revealed that Hire a Hubby sells around 30 franchises per year to leads older than 12 months.

“Having that structure when bringing a lead through is critical, as is having a quality franchise agreement,” he told delegates at the Franchise Council of Australia’s NSW/ACT Franchise Recruitment Excellence forum. “Getting a lead is one thing, but what you do with it is key.”

Adala Bolto, CEO and co-founder of fast-growing boutique fitness franchise ZADI Training agreed. Bolto, a former franchisee herself suggested franchisors consider the motivations behind the initial enquiry.

“It’s about solving their problem, not selling them something they don’t want,” she said.

“It’s exactly like when you recruit a member, sometimes it just takes a little longer to help that customer. When I was franchisee, what sold me on buying into the brand was the brand itself.”

So, if franchisors focus on solving problems and nurturing leads, which strategy best supports an effective franchise recruitment process?

Internal vs external

Sally Nathan from QSR salad and sandwich franchise Soul Origin believes it’s a double-edged sword.

The national franchising manager said identifying which model is most effective depends on the industry in which you operate and where in the brand lifecycle you exist.

“We have in the past implemented a bit of a hybrid model, whereby we outsourced some franchise recruitment. Now, that function is fully internal, but it will be different for every brand depending on lifecycle,” Nathan said.

Soul Origin’s transition to an internal franchise recruitment strategy has allowed the brand to assume control over the entire operation, but that process presents its own set of challenges, Nathan revealed.

“The first is keeping control on who you bring into the network. You need to make sure that their values align with your brand, and most importantly, that you manage their expectations,” she said.

“One of the biggest determinants in franchise recruitment is having a positive ongoing relationship, stemming from that initial conversation. It is about maintaining transparency.”

Whether the business is a heritage franchise like Hire a Hubby, an established venture such as Soul Origin or a fresh franchise face like ZADI Training, transparency is key, particularly when it comes to recruitment.

“You have to make sure those expectations align and that you don’t sell someone a dream and then let them down,” ZADI Training’s Adala Bolto said.

“Keeping it internal has its benefits. With the process, you know the prospect has the passion, the experience and motivations, but at the same time, it’s always good to have fresh eyes.”

Franchise recruitment advice

Across the board, franchise brands spend an enormous amount on recruitment, but it can be difficult to measure the return on investment.

While conversion rates provide some insight into the effectiveness of the process, franchisors would be wise to assess their current strategy.

External recruitment is a process that may cast a wide net, but with limited results. If your network is engaged and willing to reinvest in the business, the potential for effective internal franchise recruitment is greatly enhanced.

Whichever strategy you implement, Hire a Hubby’s Brendan Green believes it is critical that the method stands alone in its function.

“The most important thing that we’ve found over 20 years of franchising, is that you have systems and structures of recruitment,” Green said.

“We found that having a dedicated resource for franchise recruitment is essential, you can’t combine recruitment with another function of the business.”