The unmissable Franchise Expansion and Sale course, taught by Adriano Magalhães, director of the Salus Group and responsible for the strong expansion of the Mapple Bear network, took place on May 30, 2023 at ABF headquarters and also in a hybrid format.

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We were there and we are going to summarize our key learnings

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The choice of the franchise format is a choice for the benefit of growth.

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But not everything must be done in the name of growth, this was one of the most stressed points in the course.

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ABF is campaigning for Integral Franchising, which is transparency and clarity with stakeholders regarding the commitments made and expected benefits.

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The DRE (Exercise Results Statement) must be presented with extreme caution so as not to project unrealistic expectations, so sharing it is not recommended.

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This stage, as well as sending the COF (Franchise Offer Circular), must only be worked on if all the others have been passed.

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A hell of a lesson on how to conduct a negotiation while maintaining control over the most sensitive information under a policy On a Need-to-Know Basis, by providing details only when they are needed.

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This protects stakeholders and franchises.

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Especially because, for franchises to reach this point of consideration by potential franchisees, there is an intense battle for attention.

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We Want You

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Promotional materials with various appeals such as “Be your own boss”, “Earn up to 1 million”, “Do what you like and still earn for it”, are attempts, that everyone makes, to stand out from the crowd.

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This battle is expensive, with ads, events, fairs, and a low conversion rate.

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The emerging medium, which in addition to being cheaper and converting much more, is Member Get Member, satisfied franchisees recommending the franchise to other people with a profile.

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By any means, from this point on, the franchise will have won the interest of the potential franchisee.

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Conexão

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At this point, the history of the brand becomes the main differential, when it is necessary to establish the right connections and validate that that potential franchisee has the profile and the means to be part of the network.

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Watch the movie The Power of a Smile

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Once the brand's connection with the interested party has been established, its profile and investment capacity have been validated, it's time to sign the first agreements.

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The time between capturing attention, awakening interest and reaching the first agreements cannot be longer than 48 hours.

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Those who let more time pass, often because of a weekend in between, run the high risk of seeing the franchisee close with another brand.

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‍Speed is of the essence, Speed is the lifeblood of the business.

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Prior agreements

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These are also pre-contractual steps, important to align the important steps that will follow and ensure the commitment of the future franchisee.

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Legal, operational, and marketing validations:

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• Presentation of the terms of the deal
• The franchisee's obligations
• From the franchise's role
• The Rights of the Franchisee

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It is at this stage that the franchisee's region will be validated, whether it is on the Expansion Map and which territory will be named for it.

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Expansion Map

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Based on high-level criteria, such as units per thousand inhabitants, or units per millions of reais in potential consumption in classes A/B/C, the network has a vision of where it can install units.

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Outside these places, there's no use opening a trade.

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If it is within an area provided for in the Expansion Map, the study will move on to places with characteristics and potential for opening a new unit.

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Here we find an evolution in the classic process.

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Previously, it was common for networks to have areas of market intelligence, expansion analysis, which concentrated the power of evaluating and approving territories.

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This was because there was little knowledge about how to carry out studies and limited.

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Today, it is recommended that the consultant himself make a prior assessment, validating the network's market pattern, submitting questions and inquiries to a support team under analysis.

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The analysis team ceases to be a bottleneck and now supports the negotiations.

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This changes the game, as it greatly speeds up the process and keeps the consultant as the only point of contact, in addition to increasing their professional authority, it results in stronger ties that will be essential for the signing of contracts.

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This stage ends with the definition of the territory that will go to the contract.

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From there, you can start the training cycle, search for points and properties, legal approvals and recruitment.

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These steps take time and go hand in hand with the inauguration efforts of the new unit.

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From the classic to the modern model, we see an evolution in trading speed with a reduction in analysis costs.

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References

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Critical analysis of network expansion

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Courses

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Franchise Analysis and Expansion

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