As most franchise systems know, acquiring new franchisees is key to growing as a franchise network. However, projections for 2023 suggest that the pool of interested franchisee candidates may be getting smaller, indicating that franchise businesses will need to begin competing for leads.
What is the best way to approach this increased competition for new franchisees? Keep reading to uncover why there is a smaller pool of prospective franchisees, current trends in franchise interest, and what franchise systems can do to ensure acquisition campaigns drive qualified leads.
This article is part of a series. Check out our other articles below:
- How Franchises Can Implement Localization in Their Digital Strategy
- How Franchises Can Use First-Party and Zero-Party Data to Remain Competitive
- Can AI and Machine Learning Improve Franchise Marketing?
- How Franchisees Can Use Short-Form Video for Long-Term Success in 2023
Franchise Search Volume
Looking back to 2022, there was a strong interest in business ownership, leading to increased franchise purchases. There were many reasons for this, such as wanting better job security amid the pandemic, the desire to be one’s own boss, etc. Regardless, Google Trends indicates that search volume in Canada for terms like “start a franchise,” “buy a franchise,” and “buy a business” was up 30% on average when compared to the same period in the previous year. In some months, this percentage even went up to 100% over the year prior.
Increase in Competition and Volume
Along with the boost in search volume, 2022 had a significant increase in the volume of digital franchisee acquisition campaigns and budget levels deployed across all platforms (i.e., Google, Instagram, display advertising, Facebook, etc.).
Although there was a burst in campaign volume and budgets, the appreciation in the cost of advertising did not increase. Instead, it followed similar patterns to what occurred in 2022 – a surge during the year’s first half, less in the summer months, and a decrease in December because of the holiday season.
A Look at Franchise Interest and Acquisition in 2023
Now that we’re in 2023, franchise interest will remain high in the first three months of the year (Q1), which is typically the strongest period, resulting in a boost in franchisee acquisition spending to take advantage of this surge. Therefore, the cost of digital advertising will likely increase in the same period as in years past.
While Q1 is a momentous time to acquire prospective franchisees, as seen in previous years, it is also important to consider the current state of the economy – something that was not as much of a factor in recent years.
With interest rates rising and the threat of a recession looming, there appears to be fewer individuals looking to invest in a franchise. However, this does not necessarily mean franchise businesses must also put on the breaks, as advertising spending is not expected to be reduced this year. Put these two situations together, and you will more than likely get a higher cost in advertising, increasing costs per lead, and lower closing rates because franchise organizations are now competing for a smaller pool of individuals interested in pursuing a franchise.
Tips to Optimize Your Franchisee Acquisition Campaigns
Q1 remains a time of great interest among prospective franchisees, so it is crucial to have a plan to reach your target audience now and in the following months when interest may see a dip. Strengthening your franchisee acquisition plan is key, especially when lead volume peaks in March. This is a time when you can also allocate more of your budget toward these first few months to ensure your exposure is high, which will assist you as the year goes on when you decrease spending in months with less franchise interest.
Consider the platforms your previous acquisition campaigns lived – is it time to switch gears? Social media can be an excellent home for experimenting with various types of messages, creative, and ad units. By “testing the waters,” you can uncover what works best in attracting interest among your target audience and which platforms align with your brand.
Lead ads on Facebook and LinkedIn are great ways to reach those interested in your franchise while allowing you access to information about them to use in other acquisition efforts.
Since the competition for franchisee acquisition is strong this year, it is incredibly important to have just as strong of a communication strategy with every lead you receive. Keep in mind that you are likely not the only franchise business a prospective franchisee is interested in, so be sure your value proposition is clear, provide informative documentation, and follow up quickly to help keep your franchise top of mind for them.
As part of your acquisition plan, go through the steps a prospective franchisee would take when engaging with your campaign and build around that. For instance, when someone clicks on your ad, what is waiting on the other side of that click? Ideally, you want an optimized landing page with key details about the franchise opportunity and fast facts alongside a call to action that will get them to follow through and provide their information (or whatever your method for following up with them is).
Additionally, don’t forget about retargeting! Those who are retargeted are three times more likely to click on an ad than those who have never engaged with your franchise previously. Keep this as part of your strategy now and in the months to follow when you are looking to spend less but still want to reach out to prospective franchisees who may be interested in investing later in the year.
Interested in learning more about the topics presented in this article and other franchise digital marketing trends for 2023? Be sure to download our guidebook here.
Check out the other articles in our series below:
- How Franchises Can Implement Localization in Their Digital Strategy
- How Franchises Can Use First-Party and Zero-Party Data to Remain Competitive
- Can AI and Machine Learning Improve Franchise Marketing?
- How Franchisees Can Use Short-Form Video for Long-Term Success in 2023
