2018 State of Franchisee Recruitment.

Author:Mathews, Joe

In over 30 years of franchising, I've never heard a franchisor say, "Franchising is easier, faster and cheaper than I expected." And I don't expect to anytime soon. Here's why.

Franchisors are experiencing a disruption in their ability to recruit a steady stream of quality franchise candidates. This current market disruption leads FPG to believe market dynamics will only become more pronounced over the next three years. In no particular order, these factors are:

  1. Oversaturation of franchisors. Research firm FRANdata reports there are about 3,800 brands, more than at any other time in the history of franchising.

  2. Fewer franchise candidates are entering the market. FPG and FRANdata estimate that in any given year, only 13,000 to 20,000 franchise candidates invest in new franchises.

  3. Every year, 250 to 350 new franchise concepts emerge, further diluting the market.

  4. Decrease in new business starts. The U.S. Census Bureau in 2014 reported the lowest total in 40 years.

  5. In October 2017, the unemployment rate sank to 4.1%. Lower unemployment leads to fewer business starts.

  6. The surging stock market is currently outperforming most franchise opportunities, creating resistance toward reallocating funds for higher risk ventures.

  7. Disruption in the franchise broker community. Hundreds of new brokers are diluting the market.

    It's tough out there. And will probably get tougher over the next three years. Here's how FPG, which employs a combined 100 years of experience working with national and international franchise brands, helps clients:

  8. Expert content strategy. FPG has helped over 110 companies explain their value proposition through website development and brand storytelling.

  9. Skilled digital marketing. FPG helps companies intersect qualified franchise buyers at their point...

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