The Problem With Portals and Brokers and What I Did About It
When it comes to Franchise, there are only a few methods a Franchise Development Director has available to develop candidates who may be interested in investing in their opportunity. The cost of these options ranges from a few dollars to large portions of the franchise fee; in some cases 50% of the franchise fee is common. It might be interesting to know that you don’t always get what you paid for in these circumstances.
As Director of Franchise Development for a family of 6 international brands with more than 1,500 locations in over 70 countries, I’ve learned many lessons over time about what makes a great potential customer, where you can find those potential customers and how to involve them in the franchise sales process;
The first lesson I learned was the big difference between franchise portals and franchise brokers, as well as the options in between.
Over the past 10 years or so, Franchise Portal has enjoyed a relatively large share of the market and they have produced many viable franchise candidates over the years. At an average cost of about $34 per lead, we would think the cost per deal would be relatively low for these lead sources.
My experience was quite different.
First, let me explain further how franchise portals work.
A franchise portal is a website that is populated by hundreds of franchise opportunities, organized as a directory, which can be searched by any number of filters, industry and investment level, and universal filters across all portals. Each of these franchise pages houses a form with the aim of gathering the contact information of a potential entrepreneur who is interested in that specific concept. Upon submission, the franchisor receives these details and somehow charges a fee for this information. Generally, these fees range from $20 to $40 each.
Sounds pretty simple, right?
When these portals started to appear, their lead quality was actually very good. People who knew enough about the Internet to pursue business opportunities Quickpayportal in an entity such as a franchise portal were high-caliber investors who understood technology and had the means and education to pursue business opportunities and franchises online.
Over time, as the Internet and technology became more accessible to the masses, franchise portals were also more widely exposed. This brought a flurry of tire kicks to the table and raised the blood pressure of every franchise development director in the business.
What was once a cheap, high-quality lead generation tool has now become an annoying and oversaturated waste of time, filled with unskilled tire reducers who have big dreams and have no real ability to buy a franchise.
Franchisors currently need to buy a very high volume of portal leads to find the right candidate who ends up buying a franchise. This increases the cost per business, not only in acquisition costs, but also in resources spent weeding all tire batters.