When the City of Lamar, Colorado, learned that Sears Hometown Stores had responded favorably to the city’s retail recruitment pitch and was interested in opening a store in the community, it was a big win for the economic development program. However, Sears explained that they could not open a store until they had identified an owner/operator (franchisee), and so the process of recruiting a franchisee began.
Why Recruit a Franchisee?
Lamar’s story is not uncommon. With access to capital still tight, many retailers and restaurants have turned to franchising as their main growth vehicle. Franchising allows the retailer to open new locations without substantial corporate investment and gives local business owners access to a proven business model.
If a retailer is willing to communicate to you that they need a franchisee to move forward, then that’s a positive step in the process. It typically means they have assessed your market and would like to have a location if they can find that right operator.
For many communities, identifying potential franchisees is an afterthought. But if you are actively trying to a recruit a retailer or restaurant that leverages a franchise business model, then it’s wise to be prepared with a list of candidates.
Tips for Recruiting Franchisees
Here are three ways that communities can identify individuals willing to invest in a franchise in order to speed up the retail recruitment process:
- Take a “grass roots” approach. To identify great potential franchisees, look no further than your own community. Work with your network to identify residents looking for new business opportunities. Think about prominent business people in your community and ask them if they are considering a franchised business model.
- Tap other existing franchise owners in surrounding markets. Many times, franchise owners operate multiple store locations. Identify the other franchise owners in surrounding markets, reach out to them, and ask if they are considering adding additional locations.
- Get involved with franchise associations. There are many organizations dedicated to helping both franchisors and franchisees. Consider attending events - such as conferences and local networking sessions - and leverage the association’s message boards. The International Franchise Association (IFA) and Franchise Expo host some of the industry’s largest events each year.
Helping retailers and restaurants to identify potential franchisees demonstrates that your city is a proactive partner in the economic development process and can reduce the time it takes for a new location to open. To learn more about retail recruitment best practices, watch our webinar “Selling Your Community to Retailers.”