Smart Growth Trajectory – Suppliers Respond to Industry’s Needs
The Great Recession gave established IFA suppliers a crash course on what really matters to their clients.
A central theme at this year’s International Franchise Association Annual Convention was growth. Convention speakers Dr. Condoleeza Rice and CKE Restaurants Pres. and CEO Andrew Puzder both addressed the subject in their speeches, as did other presenters. The economy’s private sector and the franchise industry are strengthening and that, more than ever, includes IFA Supplier Forum members.
Any person, group or company that provides high-quality services, products and/or information to franchisors and franchisees is considered to be a supplier by IFA. The association designates 53 different supplier categories from accounting to vehicles, and there are thousands of companies and establishments that fall beneath this umbrella. Given these two considerations alone, IFA supplier members are indisputably important to the franchise industry as a whole, and so is their growth. This is important not only because it indicates a strengthening industry, but also because it demonstrates progress on multiple fronts.
This year saw one of the largest groups of participating IFA suppliers ever to attend the association’s convention. While the vibrant and fun host city no doubt contributed to the record numbers (who can resist Las Vegas?), the vast majority of the suppliers came because they have valuable products and services to offer their franchise counterparts. We wouldn’t be witnessing such growth otherwise.
Any member of the franchise industry, supplier or other, need not be reminded of the changed landscape of the present economy. No franchise concept emerged untouched by the Great Recession, nor did any supplier. In a rapidly changing economy, not all suppliers were able to acclimate quickly and evolve with the times. Those that did, persevered, and only became better. Those that did not, were succeeded by newcomers, taking advantage of the opportunity to contribute new ideas to the industry and to their franchise counterparts. In all scenarios, IFA suppliers are moving forward and growing in new and surprising ways, which is a great and beneficial thing for the industry as a whole.
No franchise concept emerged untouched by the Great Recession, nor did any supplier.
First and foremost, growth for the sake of growth has been replaced by a more sustainable trajectory. Courtesy of difficult lessons learned during the recession, many suppliers have taken measures to protect themselves against repeated missteps. As a result, the IFA suppliers of today are a more judicious group of leaders. The closing of locations of one’s own concept, of neighboring businesses or of paying clients, served to all as real reminders of a frustrating and frightening economic reality.
To protect against this happening in the future, IFA suppliers have diversified the products and services offered. For example, some lead generators are increasingly integrating themselves with the marketing efforts of the brands they serve by becoming search-engine optimization and search-engine marketing experts.
Some suppliers have scaled back and concentrated on core operations, like public relations firms that now focus solely on PR as opposed to branding and social media management. Others have invested in new strategies, such as utilizing public relations to amplify their message and reputation, engendering greater brand loyalty. The new approach to growth is mindful rather than swift, and as IFA suppliers depend, at least in part, on franchises as customers, this is a welcome change.
As with all economic hard times, the unfortunate collateral damage is often the loss of jobs and the businesses that provide them. While some IFA suppliers sadly lost clients or were unable to quickly adjust to the rapidly changing industry, those that remained are those that are now most attuned to the needs of the franchises with whom they work. The recession gave established IFA suppliers a crash course on what really matters to their clients. If they didn’t perform a particular service or have a particular product desired by their customers before, they most certainly do now.
Inspired by the challenges of their franchise counterparts, established suppliers have taken to solving problems in earnest. For example, lead generators are doing more for franchise development and recruitment efforts than ever before. New veterans-only lead generation portals have appeared on the web, targeting former members of the U.S. Armed Forces in conjunction with the IFA’s VetFran initiative. Some lead generators have partnered with their franchise clients to “geo-target” potential franchisee candidates, eliminating work for the franchises themselves.
Attuned to Franchisors’ Needs
Perhaps one of the best examples of established IFA suppliers becoming more attuned to the needs of the industry are the lead generators that offer call-verified leads. By contacting potential franchisees by phone and by e-mail, lead generators have identified not only a need, but fulfilled a want in their franchise clients. In some instances, budget cuts have reduced the number of employees available to recruit new franchisees.
Traditionally, lead generation portals are web-based, recruiting potential franchisees through a variety of online techniques. Some, however, have zeroed in on the real issue: contactable, verified leads. By incorporating a new call-verification system, some lead generators are able to do more than ever for their franchise counterparts, saving them time, energy and money in a deeply intuitive manner.
IFA Supplier Forum “newcomers” fill the gaps left behind by established IFA suppliers. In some cases, their arrival can be attributed to new problems identified in the industry that require solving, like in the case of Sprigster’s “Boost a Hero” and BoeFly. Funding has become more of a major issue than ever before for hopeful new business owners. Thanks to “Boost a Hero” and BoeFly, solutions have been found in new ways.
Other newcomers bring with them new technologies and strategies to solve modern problems, for example, Satmetrix with its brand reputation monitoring software. In a world that is increasingly digital and online, the ability to know and change what current and potential customers think of your brand is an invaluable tool. Of course, a decade ago, this kind of development was unavailable.
Funding has become more of a major issue than ever before for hopeful new business owners.
The franchise industry will, hopefully, continue its upward trajectory. The industry, suppliers, franchisors and franchisees have certainly proven their resilience over the past few years. The industry will also continue to experience increasing synergy between the suppliers, franchisees and franchisors. As such, the needs of franchisees and franchisors are more likely to be met in the most satisfactory ways and suppliers will become either increasingly specialized or diversified, depending upon their industry.
Suppliers will continue to innovate in creative ways that safeguard against total reliance on any one client should a situation similar to a recession reoccur. One common thread remains for all three − the happy fact that sustained growth is once again a hallmark of the franchise industry.
David S. Schwartz is CEO/owner of FranchiseClique.com. Find him at fransocial.franchise.org via the directory.