Franchise exhibitions: 10 rules of engagement

News flash: Sex doesn’t sell franchises. It just sells sex. But you wouldn’t know this from the models in short skirts hired to attract attention to stands at franchise conferences. JASON GEHRKE

By Jason Gehrke

With two major franchise exhibitions to be held in Brisbane in September and Melbourne in October, I thought I would share my thoughts on the way franchises are bought and sold.

While the availability of information about franchises for sale on the internet has taken some of the wind out of the sails of franchise exhibitions worldwide, it doesn’t replace the person-to-person contact where sellers and potential franchise buyers can meet and interact on the spot.

Most franchise exhibitions also include a seminar program, held in parallel with the expo, so that visitors can learn about specific topics of interest in a structured format. The speakers are often drawn from the ranks of the exhibitors, so have a commercial vested interest in presenting, but are generally briefed to be objective and provide useful content to the audience of potential franchise buyers.

Tips for potential franchisees:

An exhibition can only ever display a certain number of franchise systems, and won’t be able to show every single franchise offering currently available in Australia. You will see up to 10% of the approximately 1000 systems now in operation, so it’s possible that the one that might suit you best won’t be on display this time around.

Take your spouse/partner/significant other. Even if one of you will be the driving force behind any future business investment, it is more than likely that the assets of BOTH of you will need to be staked to finance it, so the decision-making process should involve both of you from start to finish.

Take advantage of the seminars to glean as much information as possible. Take a notepad and start writing a list of questions to ask a potential franchisor as you learn more about franchising.

Invest in yourself before investing in others. In other words, spend a few dollars and buy some books on franchising and small business (these are usually on sale at an expo or you can visit a good bookshop in advance) and learn about franchising. As a volunteer providing free advice at exhibitions for many years I am constantly amazed and horrified by the sheer number of people willing to consider investing their life’s savings and more on a business before they’ve spent even $20 on a basic book about franchising or small business.

Beware the glib sales pitch. The smoother the pitch, the rougher the ride could be as a franchisee afterwards. You are not buying a household appliance or some other low-value item that can be replaced under warranty if it doesn’t work. You are buying a business investment, a financial relationship with a business partner (the franchisor) for a number of years and which involves a contract full of obligations you must be prepared to accept. Buying a franchise is not like buying a toaster or a fridge, so a different approach should apply. If you feel the sales approach is too strong, then walk away.

Tips for franchisors:

Sex doesn’t sell franchises – it just sells sex. Over the years I’ve seen different exhibitors hire models in smallish outfits to attract attention to their stands or parade around an expo. While most red-blooded males may appreciate the opportunity for some guilt-free ogling, a franchisee will perceive there may not be a lot of substance behind a franchise promoted in this way.

Have real live franchisees at your expo stand. Potential franchisees will expect to hear the hype from the franchisor, but at some point they will contact franchisees to get the “real” story. Have some available to talk with at the expo, and not just those who are family members or have some close association with the franchisor, but real franchisees who undertook a decision-making process similar to that which the people attending the expo are undertaking.

Make sure your display tells the story of your business. In the main, expo visitors don’t want to be accosted or sold to, and want to interact with exhibitors on their own terms. This means that they will walk down the middle of the row, and view each stand from a slight distance as they pass. If your stand doesn’t say something meaningful about your business in the 30 seconds or less it will take the person to walk by, then you may have missed a future potential business partner.

Remember that you don’t just sell franchises. Your business has a product or service to sell too, and while you hope to meet a prospective franchisee, many of the people attending the expo could also be potential customers for your product or service. Be prepared to take these sorts of sales inquiries at your stand as well (in fact this may be the basis on which a potential franchisee approaches you initially as they sound you out).

Follow-up is always essential. Before taking inquiries at an expo, have a process in place for what you will do with these after an expo. This might include a follow-up seminar, personal interview, store or field visit with an existing franchisee, etc. Your follow-up should always be professional and not personally invasive (like the franchise salesman who phoned me a week or two after an expo at 8pm on a Sunday night – at Easter!).

As always, prospective franchisees should rush slowly, and not commit to buying a franchise before they have fully read and understood the documentation provided to them, as well as conducting their own inquiries and taking advice from lawyers, accountants or business advisors with franchise experience.

Of course an exhibition will also attract business owners curious about franchising their business, and these should pay particular attention to the rules of engagement from both perspectives, as well as glean information from the expo seminar program as part of their preliminary information-gathering before seeking professional advice.

Any comments or posts on this article are welcome. I will be presenting seminars for prospective franchisees at the upcoming Brisbane Franchise Exhibition from September 12-14.

Jason Gehrke is a director of the Franchise Advisory Centre and has been involved in franchising for 18 years at franchisee, franchisor and advisor level. He provides consulting services to both franchisors and franchisees, and conducts franchise education programs throughout Australia. He has been awarded for his franchise achievements, and publishes Franchise News & Events, Australia’s only fortnightly electronic news bulletin on franchising issues. In his spare time, Jason is a passionate collector of military antiques.

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