Human Resources
Expanding from within
Knowledge is the key
By Mark Scott
Smart Business Cleveland | March 2007
SearchPath International’s Tom Johnston leads a program that encourages franchisees to be
recruiters.
A company in the business of franchising
need not look any further than its own
franchisees for a great way to expand, says Tom Johnston, president and CEO of
SearchPath International.
“The best salesperson you can have for a
company is somebody who has already come
in, looked at what you’re doing, decided to
move forward and purchased a franchise,”
Johnston says. “That’s helped us grow the
company quickly, hit the market with a lot of
credibility, and it’s helped us keep our corporate overhead down because our franchisees
are also our sales force.”
The key to making a franchise referral program work is ensuring that the existing franchisees have the right tools to identify and
recruit new franchisees who will help the
company continue to grow.
“The right way to do this is not to go out and
say, ‘Hey, do you want to buy a franchise?’”
Johnston says. “We follow a very traditional
recruitment process.”
Johnston says that as a talent acquisition
professional services firm, SearchPath is very
familiar with recruiting. But the steps to
acquiring talent apply to any type of franchising organization.
“The first thing you normally do is you talk
to them and find out where they are in their
life,” Johnston says. “What are the things that
are important to them? What, ultimately, are
they trying to get to? The proverbial question
I always ask is, ‘Where do you want to be
three to five years from now?’”
Johnston says it comes down to “being able
to truly identify the needs, both emotionally
and financially, from a career point of view.”
Recruiting is obviously a vital part of a franchise referral program, Johnston says. But
one mistake companies often make in developing a program is building it around a territorial concept.
“The reason why many of the franchises
were built on territory when they first started
doing business had nothing to do with anything other than long-distance [phone] rates,”
Johnston says. With “the cost of doing business back in 1975, when you were doing
recruiting, you wouldn’t allow anybody to
make long-distance phone calls because they
were two or three dollars a minute. You did
all your business locally.”
With advances in technology and with the
world becoming smaller every day, territorial
boundaries should no longer be an obstacle to growth, Johnston says.
“Unless you are fortunate enough to get a
very large territory in a desirable area, I think
you run into a problem,” Johnston says. “It’s
creating restrictions that make it almost a
nonincentive.”
One enticement that encourages franchisees to be recruiters is to make them master franchisees, meaning that they get a percentage of the franchise fees and royalties for
bringing in new people rather than paying
that to someone else.
“They get short-term and long-term revenue,” Johnston says. “We look at the opportunity to create these master franchisees,
where they have a vested interest in helping
the people that they bring in to be successful.
We build that in as part of our support network.”
Franchise referral programs can be “very,
very aggressive,” Johnston says, but they can
also be very simple.
“Even if it’s just, ‘Hey, if you run across
someone who you think would be a good
referral, send them on in and we’ll send you a
gift certificate, or we’ll give you a couple thousand bucks,’ it can’t hurt,” he says. “The people that have bought in to your organization
that are happy and doing well, they are your
best salespeople.”
HOW TO REACH: SearchPath International, (216) 589-0431 or
www.searchpath.com
