Tom’s Franchise Information Blog

I believe last year was the perfect storm with respect to challenges the franchise industry faced in its franchise sales and development efforts. There were three key components that equally contributed to lackluster performance. One was a “cause”. Another was an “uncertainty” and the other was the “unknown.”

The “cause” was the abrupt cessation of funding. Even franchise sales that were actually made fell by the wayside when financing options dried up almost overnight. It also curtailed many existing franchisees’ efforts into expanding their portfolios with new locations and compounded the problem by having to tap their capital reserves to offset the decline in sales.

The “uncertainty” was the indecisiveness of franchise candidates on whether it was the right time to take the entrepreneurial plunge or not. Many were exploring franchising as a career alternative, and out of necessity, but were unwilling to “put it all on the line.” The risk factor won out and was justified, maybe rationalized, by the tight credit markets.

The “unknown” was social media. As today’s franchise candidates quickly evolved into more sophisticated, technologically advanced and educated candidates, most franchise organizations weren’t prepared for the influx of these individuals within social media networks, exploring opportunities differently than ever before. Thus, the franchise candidates that may have been qualified and well-informed were missed in many cases and either chose a different career path or are actually still searching social media sites for the information that will lead them to the right opportunity.

Now, as the public is seeing some positive trends, like gradual decline in new unemployment claims, we should begin to see more and more individuals searching for information about career alternatives. I believe many will continue to visit social media sites, participating in discussions and sharing information. All the while, they’ll be more cautious than ever, and will insist upon absolute trust in the individuals presenting the information, and the information itself, before taking the entrepreneurial plunge.

Social media is ripe for today’s candidate to explore, identify and act upon a franchise opportunity. Franchisors are highly advised to capitalize on social media and be sure to integrate the same with their traditional franchise marketing and development strategies because social media is here to stay and is truly effective at creating and/or improving brand awareness.

Paul Segreto is President, CEO and Founder at franchisEssentials with over twenty years’ senior level management, marketing and development experience exclusively within the franchising industry. Paul can be contacted by email at segreto.paul@gmail.com. Company website can be viewed at http://www.FMDpro.com.