Marketing to the 1990 franchise buyer

Nation's Business, Sept, 1990 by Meg Whittemore

Marketing To The 1990 Franchise Buyer

Today's franchise buyers are better educated, more experienced in business, and backed by more capital than at any other time in franchising history. And as the 1990s unfold, the demographics point to increased numbers of women, minorities, recent immigrants, and, of course, baby boomers eager to spread their entrepreneurial wings.

That can be good news or bad news to franchisors trying to sell franchises. "Franchise sales efforts have traditionally been aimed at a husband/wife team who have $75,000 worth of equity in their house and another $50,000 in liquid capital," says Susan Kezios, founder of Women in Franchising, a Chicago-based association that promotes franchising among women and minorities. "That `easy-sell' scenario is disappearing," she says. Increasingly, franchisors are faced with reaching the so-called "baby-boom buyer," the group of professionals age 35 to 55 who have business experience, are financially solvent, and want to try their hands at business ownership.

"These folks remain wary of big institutions, a carryover attitude from their protest days in the 1960s," Kezios says. "They are not going to accept a franchise salesperson's claims without documentation." They are looking for competitive advantages and for sales figures that hold up under scrutiny, and they have a "show me" attitude, she says.

In addition, this group is ethnically diverse, with an increasing number of blacks and women. "Franchisors who want to remain competitive this decade can't continue to ignore minorities and women in their franchise sales efforts," says Kezios.

Segmenting the marketplace in order to attract qualified buyers will be the watchword for continued growth. "The number of franchise companies has decreased, and the pool of prospective franchisees is leveling out," says John Reynolds, marketing and public-relations director for the International Franchise Association.

"If you only want to look at white Americans, over 50 years old with over $50,000 household incomes, you are necessarily limiting the kind of market outreach that you can do," Reynolds maintains.

Kezios says smart franchisors will take a closer look at cluster marketing - figuring out the motivations of prospective franchisees from the baby-boom generation and tailoring the sales pitch accordingly.

"This group has historically opted for change over the status quo and is willing to take risks," she says. Professionalism is important to this age group, and the perception of managing a service franchise rather than actually producing the service is a critical distinction for franchisors to make, says Kezios.

Finally, "franchisors need to understand that these people are interested in personal development, career independence, and working in a cooperative environment," she says. "These are the kind of advertising words I would use if I were a franchisor."