

Three common mistakes made by nascent franchise organizations
This month, we want to shine a spotlight on the mistakes that nascent franchise organizations frequently make. New franchisors often face a steep learning curve and prematurely launch brands without clear differentiators or compelling reasons to believe. Additionally, too often we see brands neglecting to leverage their existing customer base and missing potential investors who already know and trust the brand. Lastly, not having a plan to engage and nurture leads often results in missed opportunities and sluggish growth. By avoiding these common pitfalls you can build a stronger foundation for franchising success.
Mistake 1: Launching Without a Differentiator
In today’s crowded market, launching a new franchise without a clear differentiator or compelling reason to believe is a recipe for a potentially expensive failure. It is crucial to understand that differentiation is not just about being different; it is about being better and more relevant to your target audience in a way that is true to your brand.
The Importance of Differentiation – In a market filled with myriad similar brands, standing out is essential, and a meaningful differentiator sets you apart from competitors and provides a unique value proposition that resonates with your target audience (and investors). Strong brand differentiators can be based on factors like product quality, approach to service, innovation, brand values, or even celebrity ownership; and these differentiators are a cornerstone of a successful brand strategy.
A word of caution: Brands should be wary of feature- or amenity-based differentiators that can be easily adopted by competitors. Rather than differentiating your brand, this ends up increasing costs and operational complexity. In the lodging space this is called “amenity creep.”
Crafting a Compelling Reason to Believe (RTB) – A compelling RTB is the element that convinces your audience that your brand delivers on its promises. It is the evidence that supports your differentiator, building trust with customers and potential investors. Brands can have a unique differentiator but without a strong RTB, it falls flat. To back up your RTB, focus on tangible proof points such as financial results, customer testimonials, awards, and certifications.
Strategies for Effective Differentiation
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Understand Your Market: Conduct market research to identify gaps and opportunities in offerings and messaging. Understanding your audience (and competitors’ offerings) can help you pinpoint what makes your brand unique.
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Understand Your Competition: Analyze how your competitors are similar to you and identify ways to differentiate your brand from them. This can involve changes to your customer experience, your service philosophy, and even your target focus.
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Embrace Your Differentiator: Make your differentiator an integral part of your core brand message. For example, ensure your differentiation is coming across when crafting a brand statement, logo tagline, or marketing slogan.
For an interesting take on this subject, check out EHL Insights’ Hotel branding strategy: Building an authentic identity in hospitality.
Mistake 2: Overlooking Potential Investors (Hint, it’s your existing customer base)
Leveraging your existing customer base is a crucial strategy that many new franchise organizations overlook. It is essential to recognize that your current customers are not just a source of revenue but also potential investors who already trust your brand and can kickstart your growth journey.
The Value of Existing Customers – Existing customers are a goldmine for any business. They have already experienced your products or services and have developed a level of trust and loyalty towards your brand. According to Forbes, the probability of selling to an existing customer is up to fourteen times higher than selling to a new one. This trust can be leveraged to attract potential franchisees who are already familiar with your brand’s value proposition, even if you believe your target customer and target investor are not the same.
By profiling and targeting your existing customer base with your franchise offering, you tap into a network of individuals who are more likely to invest or spread the word about your franchise due to their positive experiences and established trust.
Strategies to Engage Your Existing Customer Base
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Use email marketing and social media: Leverage your email list and your followers to keep existing customers informed about franchising opportunities.
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Incorporate the franchise messaging in your existing locations: Use your current locations to promote the franchising opportunity. Display informational materials, and train staff to discuss the benefits of becoming a franchisee. This direct approach can generate interest and inquiries from loyal customers who already frequent your business.
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Implement referral programs: Encourage your existing customers to refer potential franchisees by offering incentives such as discounts, rewards, or exclusive offers.
Conclusion – Many successful brands start getting franchising traction within their existing customer base. Do not miss a valuable pool of potential investors who already trust your brand.
Mistake 3: Failing to Have a Plan to Nurture Leads
Not having a robust system in place can lead to missed opportunities and significantly hinder the growth of your franchise. This is especially true if the development team is juggling multiple job functions or if the lead flow exceeds expectations. Without a dedicated system, potential franchisees may slip through the cracks, resulting in stunted growth.
The Importance of Lead Nurturing – Lead nurturing is crucial for transforming inquiries into committed franchisees. The franchising sales cycle is typically lengthy, with prospects often exploring multiple opportunities simultaneously. Many franchisors fail to close deals because they do not prioritize nurturing leads, or they lack the infrastructure to support this effort. Without a structured plan, leads quickly forget about your brand, lose interest, or turn to competitors. A well-executed lead nurturing strategy ensures that potential investors remain engaged and steadily progress through the sales funnel.
Strategies for Effective Lead Nurturing
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Use Drip Emails: Drip email campaigns are a powerful nurturing tool. Automated emails are sent at predetermined intervals and provide valuable information about your brand, share success stories, and address common concerns. In addition to gradually building trust and interest, drip emails can keep your brand top-of-mind.
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Incorporate Personalized Outreach via Email and Messaging: Direct outreach provides an opportunity to elicit immediate responses, which in turn can help you qualify a particular lead. Use personalized emails and text messages to determine interest, provide relevant information, and encourage prospects to take the next step in the sales process.
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Use a CRM: Implementing a Customer Relationship Management (CRM) system is essential for tracking and managing leads. A CRM allows you to monitor interactions, segment leads based on their behavior and preferences, and automate follow-up actions. By using a CRM, you can ensure that no lead falls through the cracks and that each potential franchisee receives the attention they need.
Conclusion – Implementing an outreach and nurture plan that includes personalized communications and effectively engages potential franchisees to guide them through the decision-making process can elevate the investor perception of the sophistication of your franchise organization.
For an interesting take on this subject, see Harvard Business Review’s The New Rules of B2B Lead Generation
How can NM+U help? As a marketing agency dedicated to hospitality and franchising, NM+U excels in guiding nascent (and established) franchise organizations to identify and define their unique value proposition. Once a brand launches, NM+U’s digital marketing experts collaborate with client-partners to develop and execute a comprehensive marketing plan aimed at identifying, targeting, and nurturing potential investors. We are experts at setting franchising brands up for success, contact us to learn how we can help you.
Relevant Case Studies
Let’s take a closer look at how these concepts come to life in email marketing. Click through each example below to discover how we’ve successfully transformed user insights into engaging email campaigns that meet and exceed customer expectations.

Mel's Drive-in Restaurants
Franchise Sales Branding and Website
