Franchise news

03.06.2009

DFV managing director against the use of cut-price campaigns to attract new franchisees

A number of franchise systems have recently begun using discount campaigns to attract new franchisees: those who apply to become a franchisee before a certain date or via a certain website are given special conditions. In a recent interview with Franchiseportal, Torben L. Brodersen, managing director of the DFV, spoke out against using special campaigns to sell franchise licences. In the interview, Brodersen said that offering new franchisees lower entry fees or increased territorial protection creates a feeling of unrest and dissatisfaction amongst the system’s franchisees.

"Finding franchisees has nothing to do with a summer sale. They should not be looking for someone who is just on the look-out for a bargain but for suitable and qualified entrepreneurs who are able to turn a franchise concept into a successful business," Brodersen continued. Such marketing strategies are not sustainable on a long-term basis and will damage the overall image of the franchise branch.

Thomas Wohlfeld, managing director of the website franchise-net.de, is of a similar opinion and expressed this in a letter sent to franchisors. "Cut-price campaigns not only reflect badly on franchises (why do they need to do this at all?) but also confuse potential franchisees," Wohlfeld writes. One result of such campaigns is that competitors may have to follow suit "opening the door to a collapse in conditions and fees".

Franchiseportal is also against such campaigns that attract franchisees by offering different conditions. To read the whole interview with Torben L. Brodersen, managing director of DFV, click on “country report” here at FranchiseKey. (kbp)

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