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Franchisers turn to online for new recruits

New research into the Australian franchising industry has suggested that as newspaper advertising revenue drops, savvy franchisers will turn to cost effective online and word of mouth strategies to recruit new franchisees.

The Franchisor Expansion Study by market intelligence organisation 10 THOUSAND FEET revealed that the Australian Franchise Industry is fairing well in the downturn, but many are preparing for the worst by reducing marketing spend and turning to the web to promote their activities and attract new franchisees.

The study showed that in 2008 just 11 percent of new franchisee leads came from newspaper advertising, down from 18 percent in 2007. Meanwhile leads generated online grew from 38 per cent to 46 percent, and those generated by word of mouth remained static at around 17 per cent.

Ian Krawitz, Head of Intelligence at 10 THOUSAND FEET said that the shift towards online and word of mouth strategies had already delivered significant savings for franchisers.

“The new focus on these cost-effective strategies has delivered an average saving across the industry of $5,624 per acquisition, that’s almost a 35 percent reduction on the previous year.

“Online spend looks set to overtake newspaper spend for the first time this year, with a projected increase of 27 percent.”

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