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RainTree was recently asked by Franchise Times to provide the most common three mistakes they see emerging franchisors make in their attempt to meet their development goals. Here’s the story:

Brent Dowling counts three mistakes often made by emerging franchisors in their quest to grow, and he offers them in response to Franchise Times’ Living Large column, which is following young franchisors all year to see how they tackle various challenges.

No. 1: Franchisors that pocket initial franchise fees “way too early,” says Dowling, who is COO of RainTree, a Denver-based company that sells franchises for its clients, many of which are in their early years.. “We advise our partners for at least the first three years of the business, you’ve got to re-invest anything that comes in, back in the brand,” he says, such as into lead generation marketing, real estate consulting, technology infrastructure and the like.

No. 2: Franchisors that put money into their brand, but go “way too far,” building out a big office or hiring a big team. Often times they’ll bring in senior people who they can afford at one point in time. “They’ll realize franchising, or franchise sales at least, is very seasonal. It will really wind down at Thanksgiving, and won’t pick up until the end of January.” He says a great way to avoid the mistake but still serve franchisees is to outsource—hire consultants for site selection, franchise sales, etc.

No. 3: Franchisors that fail to embrace technology. “Recruiting franchisees was completely different five years ago than it is today,” he says. “It comes down to, the way that we consume content and information has changed dramatically in the last few years.” Before, franchisors would put out a teaser to pique interest, then let salespeople walk the prospect through the information. “People are used to finding all the information they need through the Internet within a matter of minutes or hours” today, he points out. “So you’ve got to embrace that. You’ve got to have a website that has all the information on the franchise opportunity.”


Click Here to read the full article on franchisetimes.com.