Perhaps one of the most frequently asked questions in
franchising is, "How do I find franchisees?" What some of
my clients have in their head is a carnival-esque vision from their
franchise youth--standing at a booth at a trade show, hawking like
the barker with the too-small basketball hoop.
Today's franchise sales process is, of course, much more
sophisticated than this. The internet generates most franchise
sales leads--by some accounts, more than 70 percent--with public
relations, print advertising, direct mail and referrals generating
much of the remainder. But for many franchisors, trade shows and
expos remain as relevant today as they did during their heyday.
Franchise Shows vs. Industry
Shows
Before exploring the question of whether trade shows and expos are
the right strategy for you, let's draw an important distinction
between franchise shows and industry shows.
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Franchise shows, the most prominent of which is the
International Franchise Expo, cater to prospects actively shopping
for franchises, people looking to learn more about franchising, and
people trying to sell products to franchisors. From the
franchisor's perspective, these events can be fertile hunting
grounds. At last year's IFE in Washington, DC, for example,
nearly 80 percent of the approximately 14,000 attendees described
themselves as potential franchisees, and more than 45 percent of
these potential franchisees indicated they had more than $100,000
to invest.
Industry shows, by contrast, do not focus on franchise buyers,
but instead on target audiences from a particular market in which
franchises may be offered. The National Restaurant Association
Show, which is held in Chicago each May, attracts over 70,000
restaurant industry professionals to a single site for four days.
And while most of these attendees aren't thinking about
franchising, about 3,500 of them reported they came to the show
looking for franchise opportunities--showing enough interest that
the NRA has designated a separate "Franchise Pavilion"
for franchisors to solicit their franchise opportunities.
The reason it is important to draw this distinction is that
franchise shows are different from industry shows in a number of
important ways other than their targeted audience.
Choosing Your Shows
First of all, most franchise shows tend to cater to a relatively
local audience. So, if you aren't targeting franchise sales in
the area where the show is located, a franchise show in that
particular market may generate few, if any, leads that will be of
value to you. (By the way, exhibiting at franchise shows in
registration states will probably require you to be registered--so
be sure to check with your attorney if there is any doubt in your
mind.)
Another factor to keep in mind is that at franchise shows, most
of the action takes place over the weekend, when people take time
off from their jobs to invest in their future. Since most of these
prospects are local, some franchisors will elect to stay an extra
day to meet with their most qualified prospects or even to hold
seminars to move the franchise sale along more quickly.
Industry shows, by contrast, often draw a national or even an
international audience. Since they will often be held during the
week, attendees are eager to go home following the show, so
seminars, receptions or other activities scheduled for the day
after the show will meet with a lukewarm response at best. Instead,
such events must be hosted during the show itself.
Likewise, savvy franchisors know not to invite their preexisting
prospects to a franchise show, as this will only have the effect of
exposing those prospects to their competition. With perhaps 300 or
so franchisors exhibiting, if your prospects go to the show, they
should find you.
Industry shows, by contrast, can be significantly larger and
more difficult to navigate. The NRA show, for example, has over
2,000 exhibitors, and your prospects will need to be in good shape
to see everyone even if they spend all four days there. Moreover,
because these shows attract such a geographically diverse audience,
they afford a great opportunity to meet face-to-face with prospects
from around the world. And since industry professionals will
invariably know about industry shows in any event, franchisors
often promote these shows to their prospects.
Not Right for Everybody
As with most marketing strategies, trade shows and expos are not
right for every franchise concept. And even if trade shows are
appropriate, you must also answer the concept of which trade show
is right for you.
In determining if a particular trade show is a good fit for your
franchise concept, you need to start by understanding the
particular buyer you are looking to reach. Virtually all trade
shows track this kind of information, so it then becomes a matter
of evaluating your target vs. these statistics.
For example, franchise shows do not tend to be a great match for
franchise concepts that require a larger initial investment. The
IFE, for example, reports that 12 percent of their attendees have
more than $500,000 to invest and only 6 percent have more than $1
million to invest. If you are looking for an experienced restaurant
operator for a franchise who can support a $1 million buildout, you
can apply the show's own numbers and your own estimate of
restaurateurs in the crowd to guesstimate at the number of
qualified prospects that might walk by, and make your decision
based on that. Based on our experience, franchise shows seem to be
most effective for franchisors with an investment requirement of
$250,000 or less.
In addition to looking at the statistics from past shows, you
should talk to past exhibitors to determine just how effective
particular shows are. The fact is, some shows are better than
others. Given the expense of time and money involved, it's
important to focus only on the shows that will generate positive
returns for you. Most shows will pre-publish exhibitor lists,
making a quick survey of exhibitors relatively easy even if
references are not provided.
When it comes to franchise shows, geography will be an equally
important consideration. While some shows command an international
audience, for the most part, franchise buyers will be driving two
hours or less to come to your show. So if you are not targeting
franchisees within that radius, your marketing dollars may well be
better spent elsewhere.
Trade Shows by the
Numbers
The most important thing to remember at trade shows--aside from
bringing a comfortable pair of shoes--is that these shows are about
lead generation, not sales. While you want to do everything you can
to build rapport with your prospects and to qualify them on the
floor, a good show provides you with a constant stream of traffic.
And that traffic may walk by if you are too busy with a prospect to
engage them.
One solution: Bring more people to help you work the booth.
While booth space will cost you several thousand dollars and up,
numerous "hidden costs" need to be included in your trade
show budget--and should be included when tracking costs-per-lead
and costs-per-sale. Perhaps the biggest cost is that of travel,
food and lodging for those working the booth.
Another "hidden cost" is the cost of the material you
provide to those who pass your booth. On one hand, you'll be
meeting with prospects who just met your competitor, so you want to
put your best foot forward. On the other hand, with hundreds of
prospects stopping by over a four-day period, you could go through
a small fortune handing out brochures that you printed at $3 or
more per piece. It might help to develop a small but professional
flier or handout that you provide to all the "bag
stuffers" who pass your booth--but keep a supply of your
full-sized brochures under the table to pass out to your most
serious prospects.
All tolled, you can probably expect to spend at least $10,000 on
any given trade show. If your experience is similar to the
anecdotal experience of some of our clients, a good show will
probably generate a couple of hundred leads, several strong
prospects and, assuming you are handling the sales process
correctly, one to three franchisees.
Some years ago, as the popularity of the internet began to rise,
trade shows and expos declined in popularity and foot traffic. In
more recent years, our experience has been that they have bounced
back strongly. And while they no longer generate the foot traffic
they once did, trade shows and expos provide many franchisors the
ability to get up close and personal with a very specific prospect
in a very specific geography, which can be a very strong
combination indeed.