When developing a new franchise program, franchisors must manage the sale of new franchises. Franchises must be sold with a well-designed strategy that reflects the franchisor’s ability to serve and support new franchisees. If the franchisor is based in Dallas, you shouldn’t start selling franchises in New York or Florida unless you have a fairly simple and unique franchise concept that requires little to no support.

It is equally important that franchisees have the ability to successfully penetrate a new market. One or two locations in a market may not be enough to establish strong brand recognition. In most cases, this means that franchise growth must develop from the base of operations. Several well-respected and highly developed franchise companies, such as Panera bread and Dairy Queen, will not enter a market unless a franchisee can open a minimum number of locations. They recognize the need to cluster locations into one market, rather than a franchisee with one location fighting for sales.

When starting a franchise, most new franchisors are tempted to accept every qualified franchise lead and then chase each one to closing. If the franchisor follows a regional development strategy, in which the developer will assume some of the franchisor’s administrative duties, franchising over a wide geographic area may be less of an issue.

However, in most cases, a new franchisor sells franchise units instead of using regional developers. In this situation, the challenge is how to control franchise candidates. Additionally, there is the possibility of losing a good candidate from a geographic area beyond the new franchisor’s service capabilities. Here’s a simple strategy that can help answer these questions and more.

• If you want to control your leads, then maximize your website to generate leads. Cost-per-click programs through Yahoo and Google can drive potential customers to your website efficiently and profitably, with the ability to control the source of clicks to regions or states.
• Set market priorities and stick to the plan. If you need to have a minimum of 3-5 locations in a specific market, build your franchise sales strategy and lead generation programs around this approach. Consider using franchise brokers to work in those specific markets.
• Use local advertising, such as a major newspaper or other local publications to generate leads. As an example, an ad in the operations/franchise section of the Sunday New York Times can be placed for as little as $300-400. This strategy can limit your lead generation to one geographic area.
• If the franchise lends itself to regional development, consider using that strategy for markets that are a considerable distance from corporate headquarters. This allows unit franchises to be close to headquarters, while those far away can be serviced by a regional developer. The regional developer may be responsible for training and support.
• Consider District Managers who can work from a home-based location. They can be a valuable resource for prospective franchisees and new franchisees far from their corporate base.

If you have a simple franchise concept that requires very little support, your expansion strategy can be flexible. However, if your franchisees require support and compliance audits, be careful to avoid distancing yourself from your resources.