How Much Should You Budget For Franchise Lead Generation?

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How you should prioritize your franchise lead generation spends to find more buyers

It’s that dreaded time of year again.

It’s time for the franchise sales team to face the firing squad. On the spreadsheet, your franchise sales projections for the past year looked wonderful but they just didn’t pan out. Or perhaps you are having a great year and you just learned your CEO expects you to double performance next year.

Facing the firing squad isn’t fun and developing a new game plan is never easy, but there are ways to prioritize your spending to deliver stronger results. Read on to learn more about crafting a more efficient and productive budget for 2014.

How Much Does the Typical Franchisor Spend on Lead Generation?

The Franchise Update Media Group published this stat from its recent report on the state of the industry:

Out of 106 companies surveyed at the 2013 Franchise Leadership & Development Conference, the average 2012 lead generation budget was $197,000, and the average 2013 lead generation budget was $209,000. These numbers don’t include broker fees, salesperson compensation or overhead — just direct spends on lead generation.

Here’s what franchisors spent money on in 2013, according to the Franchise Update report:


The average franchisor in attendance at the conference expected to add fewer than 22 units in 2013, and the expected cost per close was $9,452.

For brands like Menchie’s frozen yogurt, Chem-Dry carpet cleaning and Marco’s Pizza, which are serious about adding franchise units, $209,000 is far less than they spend. Here’s what a franchise sales budget would be, using the Franchise Update average cost per close, based on the number of units they plan to open:



Why the Franchise Update Report Might Not Apply to You

For the record, we love both the annual Franchise Update report and Sales and Leadership conference and look forward to it every year. It remains one of the best sources of lead generation data in the franchise industry — but this year’s survey results, based entirely on questionnaires from salespeople and executives, left out some key points we think you should consider when creating your budget:

  • The survey lacks a category for company franchise website, which has been and remains, hands-down, the most productive source for new franchisees for the majority of companies we work with. This might be one of the reasons the “Don’t Know” and “Other” categories were so large — people didn’t have a place to report spends on company websites. Company websites are no longer considered “electronic franchise brochures” — they are content- and video-rich, telling an engaging story targeting your ideal franchise candidate, answering four basic questions to the satisfaction of your target franchisee: “Is the business unique?”, “Is it profitable?”, “Will it survive the long haul?” and “Can I see myself doing it?” The website is an executive summary of your franchise opportunity that is designed to engage your target candidate and invite them to learn more.
  • The survey included a “Social Media” category but didn’t take into account online content marketing, which has become one of Franchise Performance Group’s clients’ top methods for recruiting franchise buyers. Brand journalism, is a unique type of content marketing that relates a company’s story and intersects with franchise buyers online at their point of interest. Our clients find this to be their most cost-effective and often top source of franchise buyers. Our approach currently doesn’t have its own category. This strategy encompasses and overlaps social media, the company website, SEO, SEM, blogging, pay-per-click (PPC) and PR — feeding valuable content to each of those streams, driving the franchise buyer back to the website where they hear the rest of the franchisor’s story.
  • Direct mail, email marketing, internet radio and seminar marketing remain viable avenues for recruiting franchisees for well-funded franchisors, but they aren’t highlighted in the report.

We recommend franchisors purchase and use the Franchise Update report as a starting point when crafting a budget. In particular, Franchise Update does an excellent job educating franchisors about the nearly $10,000 hard cost of recruiting each franchisee. Want to open 100 new locations? Don’t plan on doing it without a substantial spend on lead generation.

What You Spend Money on Matters

Anyone who has ever done business with Franchise Performance Group knows we are very transparent in sharing our breakthroughs and findings. We share Franchise Update’s philosophy that sharing details improves our industry. For our general recommendations on where to spend your 2014 ad dollars, we relied on three sources, in this order:

  1. Measuring the results from the dozen or so advertising budgets we are currently managing
  2. Conversations and networking with other franchisors who are ahead of the curve
  3. The Franchise Update report

How Much Should You Plan to Spend?

When we take on a new client or research a proposal, we see a lot of franchisors make advertising spend decisions based on the anecdotal feedback from salespeople who may not have an accurate handle on where leads really come from or what forms of marketing really influence someone to buy a franchise. In fact, no matter how large the system is, this seems to be the most common method of deciding where to spend money for lead generation.

Franchise salespeople are the closest to leads and often create large emotional attachments to a lead source based on a handful of recent conversations. If they have a good conversation, “the advertising is working,” and if, after some brief calls, the last few leads have been undercapitalized, “the advertising isn’t working.” They may, however, be blind to the big picture: what sources generate the most buyers.

Smart franchisors don’t really want leads. They want buyers.

Lead generation is pointless. Franchise buyer generation is everything.

Getting someone to fill out a form on your website is not the end zone, it’s the kickoff. A franchisor isn’t in the end zone until a franchise agreement is signed.

From this point forward, we are going to discuss franchise buyer generation, not lead generation.

To generate franchise buyers, everything you do — from advertising, website content and the franchise sales process to email drip campaigns and discovery days — must be consistent with how and why people buy franchises, or you’ll lose buyers to more astute franchisors. Dr. Phil once said there are only two types of people, “Those who get it and those who don’t.” Be one who gets it.

Many lead generation vendors have never worked the leads they generated. They have opinions and theories, but little real work experience. Franchise Performance Group consultants have a combined 70 years of experience in the franchise sales trenches. We’ve actively recruited close to a thousand franchisees. We know how and why some buy and others don’t. It shapes our recommendations for clients.

Here are our methods for creating buyer engagement, or what we call “FPG Rules of Engagement.”

Rule 1: Know Who Your Buyers are, What They Need and What They are Concerned About

Franchise sales executives love statistics. They want to know, “How many leads does it take to generate an application?” “How many applications does it take to recruit a franchisee?” and “What’s my lead-to-close ratio?” While we believe tracking this data is important to establish patterns, it doesn’t necessarily mean what most franchise executives think it does.

For these stats to be the truth instead of just a pattern, you must assume some previous relationship exists between the leads, as if 100 leads get together in a room with a moderator who says, “OK folks, we need to decide who is going to buy the franchise this month. Casey, you are going to be the franchisee this month. Bernice, Charlie, Wanda and Sam are going to fill out applications but decide not to move forward because of family issues. John and Barry are also going to fill out applications and attend Discovery Day, but decide they aren’t going to move forward because they can’t get the territory they want. And Bob will fill out an application but will be quickly disqualified because his credit stinks. If you can get your act together, Bob, you can be the franchisee next month. The rest of you disappear after your first conversation with the franchise sales representative and never respond to emails. You’ve got your marching orders. Let’s go!”

Because no such relationship exists, stats imply a pattern. If the pattern is workable and consistent with your long-term objectives, keep doing more of the same. If it isn’t, then change what you are doing.

Rule 2: It Only Takes One Lead to Recruit a Single Franchisee

World-famous “Consultant to the Consultants” Peter Block once told me, “Lead generation is easy. It’s showing up where people who need what you have are already looking for you.” And he’s right.

What medium does every franchise buyer who needs what you have use when they are researching their franchise options? The internet.

Are you showing up where they are looking?

When Franchise Performance Group outlines a budgets for our clients, we always start with where we are most likely to intersect and influence qualified buyers at their point of interest (the internet and franchise opportunity website), then work our way down to less and less effective spends as the franchisor’s budget allows. Internet lead generation is where the majority of your closes should come from. If that’s not happening, you have an underperforming strategy for growth.

Rule 3: If your Franchise Opportunity Website is More Than 2 Years Old, It’s Time for an Overhaul

Our budgets always start with maximizing conversion rates and increasing buyer engagement on the franchise opportunity website, which should serve as a hub for all your lead generation efforts. A thoughtfully organized site that tells your brand story will not only generate the best leads, it will make it easy to track your lead sources so you can continuously optimize your spending. A great site makes all your advertising more effective. A weak site makes all advertising more expensive.

A content-rich website that tells the brand story isn’t optional today; it is the ante to play the game. The old query, “How much content is too much?” has been decided.  Buyers want your story. They want a LOT more content than you think you need.  Early on, they want to read it; they don’t want to hear it from you. The tactic of just telling them enough to whet their appetite” doesn’t attract buyers; mostly it attracts tire-kickers.

Recently we had a conversation with an emerging growth franchisor that went something like this:

Franchisor: We need lead generation help. We aren’t generating the right kind of leads.

FPG: That doesn’t surprise me. We are on your franchise opportunity website and you don’t have engaging content, a compelling story or a call to action. I don’t see any information that would lead me to believe your franchise is a unique, sustainable, defensible and compelling business. Start with overhauling your website.

Franchisor: We just overhauled our website.

FPG: Your website isn’t consistent with how people buy. It doesn’t give them what they want. It’s making all your advertising more expensive and less effective. It’s counterproductive and costing you deals.

Franchisor: We don’t get any leads from our website.

FPG: It’s because your website is inadequate and your story is poorly told.

Franchisor: We don’t think people read the content on the website.

FPG: It’s because your content isn’t worthy of being read. You have a great story, but it’s poorly told. We average a 300% increase in leads when we tell the franchisor’s story effectively on the site. Not only does the franchisor generate more leads, their conversion rate to franchisee increases, creating a total breakthrough.

Franchisor: We’re not convinced.

FPG: We have all the before-and-after data. Our strategy works across brands, categories and investment levels. It’s the winning formula.

Franchisor: We aren’t convinced buyers use the website.

FPG: (thoughts that thankfully didn’t make it into the conversation) Are you convinced the world is flat? Are you convinced the Earth is the center of the universe?  

By starting with an overhaul of your franchise website, then tackling other lead sources in the right order, you can continue to add more qualified buyers at a lower average cost.

In today’s market, the design of your website is not as important as the content. Web designers are not journalists; they don’t know how to report on a brand, craft a story and publish it in meaningful ways to an audience. When you start to talk to vendors about your website, start with who can produce content first before you focus on design. A pretty website is worthless if it doesn’t engage buyers.

The first item in your lead generation budget should always be your franchise website. Google has issued 29 updates to the search algorithm in the past two years, all focused on delivering better, more relevant content for people. These changes are not designed to make life difficult for web developers and marketing executives; they are designed to give Google’s users what they really want when they use a search engine.

People want original, detailed, article-format content above all else. You might be surprised by how much depth web searchers are looking for. In a recent study of how much content people prefer, SEO research firms discovered that home pages for many top-ranking websites had more than 2,000 words. That’s the equivalent of 4-5 pages of a Word document. FPG looked at different categories of franchisors. Those who dominated organic search uniformly had more content on their website than their competition.

How many words does your franchise website have on its home page? How many pages does the website have, and what do you think the total word count is? How much content do you think franchise buyers want? If you have been following the conventional logic of the current crop of website design companies and lead generation experts, your website and content strategy is three years obsolete and your site has far less content than you need.

When franchise buyers research brands, they dive deep. Our study found that franchise buyers spend more than 50 minutes on a franchise website before opting in to the sales process. Keep in mind that these are the people who actually buy. Franchise leads — those who fill out a form but don’t buy — spend less than 15 minutes on your site. The lesson: Buyers read deeper and read more, and leads read less and skim pages.

Does your website have articles and stories or “bullet points?” Does your website encourage people to skim, therefore appealing to those who don’t move forward? If you want more buyers, you have to satisfy their appetite for detailed information. You have to anticipate and address their concerns. That means a website with 20 to 30 core research pages and a continuously updated blog/newsroom section.

What does it cost?

Expect a professional content website for your franchise system to cost between $25,000-$30,000 and have at least a 2-year lifespan. Budget money to add stories and content WEEKLY. Do this before you do anything else.

Your website should include

Your website should be comprehensive, informative and visually engaging. Include graphics, infographics, photos, franchisee interviews, reporting, answers to frequent questions and a detailed downloadable franchise report. Your website should come already optimized for organic search and should have an easy-to-use content management system (CMS). We prefer WordPress for franchise lead generation websites. Most high-performance franchise sites are now built on WordPress because it is designed from the bottom up for content marketing, which drives lead generation. It is easy to use and works better for SEO than any other CMS platform.

Keep in mind that a franchise website has one goal: convert unique visitors into potential buyers franchise salespeople can have conversations with. Online brochures and flashy websites, although pretty to look at, often fall far short when measured against this goal. Evaluate web designers and lead-generation firms based on their track record of conversion rates, SEO knowledge and ability to demonstrate that they produce closes.

Rule 4: Content Marketing Should be the Cornerstone of your Lead Generation Efforts

Every franchise system has a story to tell, and there are a lot of people out there who are interested in becoming a franchise owner and are eager to hear your story. Without it, they will look elsewhere. These people, part of what business expert and author Seth Godin calls your tribe, are already searching for you and are already interested in what your franchise offers, whether or not they even know who you are. These people have questions about your offering, and, because they are already interested in what you do, are pre-wired to tune into stories about your brand. As long as the stories are relevant, well-written and provide evidence of success, they will succeed in further engaging candidates.

As we have often written, franchise development has lost the first conversation with a candidate to the internet. The franchisor-controlled front end of the pipeline has been replaced by buyer-controlled, self-directed research. Content marketing allows you to regain that conversation by providing the content that potential franchisees are looking for. A specialist who understands franchise recruiting and how people perform online research can use reporting and storytelling skills to weave an ongoing and visible story about your brand. A franchise development blog attached to your franchise website provides a natural home for your brand’s story, and as leads discover your website, likely buyers will reveal themselves by diving beyond the main research pages and into the ongoing story of your brand. Best of all, the content that is generated can be redeployed in other ways — online wire releases, social media posts, guest blog articles, franchise portal ads, email campaigns and drip messages — to boost engagement and draw in more leads.

There is the primary difference between “copywriting” and “brand journalism.” See which attracts buyers.

Marco’s Pizza is our client. They are to pizza what Five Guys is to hamburgers, leaders in the “better pizza” category.

A copywriter crafted a slogan like, “Own your slice of the American Dream with Marco’s.”

FPG employed a brand journalism approach and told the following story: “Marco’s founder, Pasquale Giammarco, was so obsessed with the quality of his sauce that he worked with horticulture experts to develop his own hybrid tomato, which gives Marco’s sauce its distinct flavor profile. He was so obsessed with the quality of his dough that he only uses wheat harvested in springtime from northern Minnesota.”

If you were considering opening up a QSR restaurant, which message would you respond to? Don’t you want to at least try the pizza of the guy who was so consumed with creating the perfect pizza that he felt compelled to develop his own tomato?

Brand journalism attracts buyers. Copywriters sell. Franchise buyers only want to be informed; they don’t want to be sold.

The cost of utilizing a brand journalism-style content marketing strategy ranges depending on the track record of the firm. Most are priced similar to what PR firms charge: $3,000-5,000 a month. FPG charges $3,500. Keep in mind that brand journalism drives SEO. Because of radical changes Google made to their algorithms, there is only one proven way to raise your SEO position: publish content. SEO is content marketing, and content marketing is SEO. Smart franchisors have fired their old SEO firms that specialized in shady SEO practices and have already hired content providers.

Rule 5: Know What Search Terms Drive Traffic

Franchise candidates use the Internet to research and learn about brands. If you don’t take ownership of the search results people find and make sure your site and content rank highly for important terms, you are likely missing the best opportunity to grow your brand. Franchise portals understand this, and their focus on organic and paid search in 2012 and 2013 is the biggest contributing factor to the increased results some systems are having with portals.

Select a content firm that knows SEO and has experience managing both PPC and organic SEO. Successful marketing is all about getting your message in front of people wherever they are looking, and most people are looking at Google as they begin to research your brand and industry. Solid SEO is a critical piece of your lead generation effort.

Work with someone who understands the connections between how people buy franchise, the language they use and the tactics needed to get your story in front of the right people at the right time.

What does it cost?

Select a firm that can give you detailed reporting that pulls in website metrics, conversion rates and some measurement of online visibility. Some content firms do this as a bundle, which lowers cost. SEO costs vary, ranging from $1,000-$4,000 a month. FPG offers clients these services.

Rule 6: Use PPC and Retargeting

Pay-Per-Click advertising, also known as SEM (search engine marketing) — and often conducted using Google AdWords — has a poor image. Ask around and you’ll hear lots of horror stories about large spends where an SEO firm promised a lot of clicks that would generate a huge number of leads. They often succeeded at delivering the clicks — with each one costing money — without ever delivering buyers. Companies wasted precious resources without getting much in return.

Pay-Per-Click advertising is making a comeback, though. With all the updates Google has made over the past two years, many companies are struggling to rank organically, and they miss out on traffic they need to attract buyers. FPG learned the type of visitor who clicks on one of the top three paid search spots is very similar to the person who clicks on an organic search link. If you know which organic search terms are drawing web traffic and buyers, then you already know which terms you should target for your PPC campaigns. By targeting terms more carefully, you can achieve a high ROI.

Retargeting is a newer franchise lead generation tool. It tracks your website visitors, allowing you to advertise on other sites they visit if they have not filled out a lead form. This form of online marketing is inexpensive, since you are only marketing to people who have already visited your website. The ROI is excellent, since previous visitors who return are much more likely to have a conversation with you.

What does it cost?

Our advice on PPC is to work with someone who specializes in franchise development. Firms that manage local SEO or PPC for the consumer side of a brand often lack the skills or sophistication to attract franchise buyers, and the result is large spends and lots of wasted advertising with little to show.

A PPC campaign consists of a management and reporting fee along with a budget for the Google advertising (paid directly to Google.) Management costs vary and are usually based on spend, starting at about $500 a month and going up, depending on how large your campaign is.

Your content marketing firm or the same firm that manages your PPC typically manages retargeting. Cost ranges from $100 a month to about $800, depending on traffic.

Rule 7: Rethink Franchise Portals

Franchise portals have come a long way in the past couple of years, and today, as the Franchise Update report for 2013 showed, more companies report selling franchises to portal leads.

We always include some spend on portals in our budget, but it comes after the steps above. We prefer portals that have redesigned sites so they are more search-friendly, and we like working with portals that offer a variety of lead generation options ranging from flat fee to pay-per-lead or pay-per-visitor.

All portals are not equal; a portal may do well in your segment but not for another industry. Some portals use “shopping carts” that ask a visitor if they would like to request information from other companies in addition to the one they were searching for, and the visitor can check boxes to request information without ever having read even a word about your company. Avoid these! There’s a reason we call them “visitors” rather than “buyers.” These are people who have zero engagement with your brand but still cost you time and money because the portal is counting them as “leads.” Work with more reputable portals that don’t use shopping cart check boxes to boost their numbers and waste your salespeople time resources.

FPG has good experiences working with Franchise Gator, Franchise Solutions and We appreciate their pay-per-visitor option, which sends visitors to your website for a small fee and lets your franchise website convert them into the process. This allows leads to do deeper research and prequalify themselves further, and should result into a higher than the 1-deal-per-400-leads results that many franchisors are experiencing.

One word of caution: Response time is critical for franchise portal leads. Leads from portals fill out an average of four forms at a time. Because of this, the first person to call is usually the only one who earns a conversation, and the three stragglers never get to talk to the lead. Immediate response is key.

What does it cost?

Franchise Gator charges by the lead, and costs vary. Depending on the portal, pay-per-lead costs range from $20-$50, with $35-$40 being average. Pay-per-visitor costs also vary from $2-$6, with $4 being average. Flat-rate advertising, the most common, ranges from $400 to several thousand dollars, depending on the package. We recommend having at least two portals in your mix, but don’t make portals the bulk of your lead flow. If portals are 20% of your spend and deliver 30% of your lead flow, that’s a good, balanced mix that will give you the potential upside from portals without putting all your eggs in one basket.

Rule 8: Use Franchise Portal Email Campaigns

Email marketing may be expensive, but it can still deliver results. We recommend purchasing dedicated blasts from franchise portals.

Because email leads opt in, an email lead is often higher quality and more engaged. They can differ from a standard portal lead for this reason, even though they come from the same list.

We see these email campaigns as a way to boost traffic to your internal, organic lead-generating website. The page or website you use to convert leads can make a huge difference; more leads is not necessarily better. We recommend using a segment of your company franchise website, especially if you have a form that offers a downloadable PDF document that a lead can read. Sending leads to your portal ad page or a request-for-information form can generate large numbers of low-quality leads — but that’s not what you’re looking for. By sending these leads to your website, often on an internal page that is designed to track the efficiency of the email blast, you can provide more detail and links to other pages, producing higher quality leads. Work with someone who has a track record of producing closes from email campaigns, not just leads. Consider doing a portal email campaign once a quarter, alternating portals on a regular basis, and tracking results annually, not just per campaign. You might not get a close off every campaign, but over time, this is often a low-cost-per-close lead source.

What does it cost?

Email blasts from portals range in price from $750 to well in excess of $5,000. Most campaigns we have launched for clients in 2013 ranged from $2,000-3,000. Almost every portal offers email campaigns.

Rule 9: Use Social Media Marketing – Facebook and LinkedIn

Social platforms remain good sources for lead generation. Franchisors see spotty results, not because the platforms are weak, but because their strategies are ineffective. FPG has had success generating buyers from two primary social media platforms: Facebook and LinkedIn.

Facebook best practices

Don’t separate your consumer and franchise development Facebook efforts. Your existing customer base is both the audience of your consumer Facebook page and often your best source for franchise buyers. Use the blog on your franchise development website to publish content and use rich links on your consumer Facebook page to drive entrepreneurial customers to your franchise site. Using Facebook’s advertising and promoted post tools, you can maximize traffic to your franchise website and also create lots of public, positive reinforcement of your franchise opportunity right on the page. We don’t recommend using a franchise info tab on Facebook — rich links featuring photos and catchy status updates do the best job of capturing the attention of both consumers and franchise candidates.

LinkedIn best practices

LinkedIn remains one of the most viable sources for quality leads. By posting articles — mostly blog articles on your franchise website — to relevant LinkedIn groups, you can spark conversation with highly qualified leads.

Generating Facebook and LinkedIn leads works best if you can tie it into your content marketing strategy. Our best advice is to have company officers — the VP of development and the salespeople — post messages on their profiles and in LinkedIn groups. This works.

What does it cost?

This type of marketing only works if you have content marketing underway, and it only works if the content you link is connected to your franchise website so you can convert a LinkedIn reader into a lead. Cost is incremental if you are working with a vendor providing content marketing, though it is important to take the time to post articles and reply personally to any questions. If you don’t have a content marketing firm, see steps No. 1 and No. 2.

Rule 10: Use PR

Part of generating franchise leads is getting your message in front of people who are already interested in you. Traditionally, franchise systems hired PR firms to get their story out to the media, in hopes that they would write positive stories in publications.

PR firms have taken some hits in the last few years as it has become much more difficult to demonstrate a return from money spent. Articles and impressions are worthless to your brand unless you can show that specific leads come from a specific article. Traditional forms of media (print, radio, television) are losing traffic, which makes PR less effective.

Additionally, the media controls and edits your story; you have no say-so. That’s why we recommend tools where you can publish and control your own story. Your ability to generate buyers is completely tied to your ability to tell your story to buyers at their point of interest.

A mistake PR firms often make is not writing for or pitching to the core audience of potential franchisees for your brand. Consumer PR is very different in scope and tactics than franchise development PR. If you do engage a firm, make sure they understand how to route online traffic to your franchise website and use IP address tracking so you know the origin of every lead that comes through your website. Look for firms that have development experience in the franchise industry or those that have industry contacts in your segment.

Don’t confuse the use of online wire releases — a staple of content marketing — with PR, which focuses more on media outreach and building relationships with journalists in order to place stories in publications. Wire releases do wind up in some reporters’ inboxes, but their most important role is in building organic search terms that lead web searchers to your website or directly to your sales team. Wire releases should be designed to communicate directly with candidates doing online searches rather than to update journalists who may or may not decide to write about your brand.

What does it cost?

PR firms range in price from $3,500 and up. Consumer PR firms struggle with lead generation, and few really understand franchise development.

Rule 11: Rethink Radio

Google is adjusting its search algorithms to favor longer-form, article-based content. Do a search in your franchising category and you’ll see a range of longer articles ranked on the first page of the search engine alongside brand websites.

The reason is simple: Google tracks how long people stay on a website and assigns better rankings to sites that deliver content that people find engaging — and what people find engaging are websites with lengthy articles that offer a wealth of detail. People like stories. Technology has evolved, but our desire for a good campfire tale remains the same.

Radio advertising has made a comeback for the same reason. Radio, both internet and broadcast, gives brands a chance to tell a compelling story in the form of an ad. Listeners are captive and paying attention — and if the ad paints a vivid picture and relates to a listener’s interests, it produces good results.

Radio can be expensive, and it doesn’t always work — it can be hard to make a big enough impression that people will remember your phone number or website and act on it once they get out of the car — so this should be one of the last spends you make. Radio does work much better if you use trackable phone numbers and route people to your franchising website for more information rather than a landing page. Leads from radio are just like leads from other sources — the higher the engagement level and the more content they have to read, the more likely they will be to take your call and opt in to the process.

Franchisors used internet radio with great success for a few years, especially when few companies were advertising. In 2012, more franchise companies saw the value of internet radio, and now some segments are saturated, increasing advertising costs and lowering lead flow.

What does it cost?

Radio ad costs vary greatly. Internet radio can start at $10,000 a month and go up. Local radio — which can be good for geo-targeting leads — can be as inexpensive as $500 a month.

What a Budget Looks Like

Now you have a recommended, best-practices order of how to make your spends on lead generation. Here’s how we would create a budget for a company wanting to generate 20 closes in a year:


Notice that this budget has a lower projected cost-per-close rate than the industry average. This budget does not take into account franchise brokers, who typically have a high cost-per-close, nor does it include print or PR. If you have limited funds, stick with what is proven and cost-effective and maximize the spend before tackling the higher-cost, riskier items.

This budget focuses on lower-cost lead generation items and includes producing a state-of-the-art lead generation website that is designed to take advantage of the changing way people are buying franchises today. In our experience, focusing on building up your company website and using a content marketing firm to increase quality traffic and SEO pays off and generates a higher ROI than other, traditional lead generation tactics. No matter what your budget is, we always advise clients to start here, as a high-conversion rate website with the right scope of brand storytelling should be the foundation of all your lead generation spends.

Here’s what a budget should look like for a goal of 40 closes in a year:



You’ll notice that this has a higher budget, enough to add in a PR firm, more portals and a higher spend on PPC advertising. As long as the close-rate metrics hold up — which requires skilled salespeople who work leads aggressively and a franchise system with good unit economics and strong validation — the more you spend, the more you should be able to close.

Here’s what a higher-end budget, perhaps for a larger and more rapidly growing brand, would look like:


Notice a much higher PPC spend and taking on advertising from sources like, which produces results but isn’t affordable for anyone with less than a $240,000 annual lead generation budget and some print advertising. Print rarely produces much of a return; most people simply use the internet, and even people who still read print media are also looking online, so it pays to focus resources on digital lead generation.

What to do with his information

Is it time to create or revise your budget? Follow the advice in this article and you’ll be far ahead of most systems.

If you want expert consulting to help you evaluate your company’s performance and options, talk to us and see if we can help your brand the way we’ve helped many others.