How Much Should You Pay for Franchise Lead Generation?

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If someone asked you 20 years ago which newspaper they should advertise in for franchise leads, you would want to know several things.

How big was the circulation of the newspaper? Was it a serious paper with articles on finance and business? Who were the readers?

Now, you have many more options: print, online, press release, display ads, search, pay per click, business directories, and trade shows.

How can you get more from my franchise lead budget with all these various options? How do I re-balance between them? What makes sense as a better balance? How do you decide where to advertise?

The basic methodology remains the same as it was 20 years ago.

And fortunately, much of the answers are far more transparent today than 20 years ago.

The General Test

1. How much am I spending now, in a particular medium?

2. What are the general metrics for that medium in terms of readers & time spent?

3. Are there cheaper substitutes which have similar engagement metrics? If so, put more money into the cheaper but similar substitutes and see if you get more leads. Repeat every 6 months to a year.

Here is a simple example, using data from 2012.

We know from the 2012 Franchise Update Survey that the median spend for lead generation is between $150 - $175k.

Ad Balance.png

1. The Franchise Portal Spend

On average, then people are spending between around $42,000 and $51,000 on advertising for leads using Franchise Portals.

In essence, the format on the Franchise Portal is a display ad in a business directory with an application form to fill out for more details.

2. What are the Engagement Scores of the Franchise Portals?

It is very easy to get some objective comparsions between the various Franchise Portals.

I compared our site, to 4 webportals:,, &, in 2012.

Click on the image below to expand it.


First, you want to focus the rank in US.

1. Franchisedirect

2. Franchisegator

3. Franchise-Info



Second, you want to pick some measure of engagment, say time on the site.

1. Franchise-Info

2. Franchisedirect

3. Franchisegator



Or you might pick pageviews, as another measure of engagement.

1. Franchise-Info

2. Franchisedirect


4. Franchisegator


3. Are there cheaper substitutes with similar engagement scores & that should produce the same number of leads for less?

Suppose your budget shows that you have been paying $800/month per display ad for portal 1 and $600/month for portal 2.

First, forget about the actual leads because we are interested in maximizing expected leads.

Second, is portal 2 more engaging than portal 1?

This calls for some judgment about how to balance relative rank against pageviews and time spent.

Make your decision, record the reasons why, and then revisit it in 6 months. Do the numbers still make sense? Is there evidence that you made the right trade-off? Should you rebalance again?

Keep at it and over time this rebalancing method will prove to produce better leads for less dollars.

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Many franchisors would do better to drop 2 or 3 of the franchise portals that have the worst engagement and spend the money elsewhere - direct response, on trade-shows, or even spend more money nurturing leads.

A myth that justifies underperforming franchise web portals that don't generate any franchise sales is that your franchise brand will benefit greatly from increased SEO.

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About this Entry

This page contains a single entry by Michael Webster published on October 12, 2014 7:02 AM.

The Surprising Relation between the Roman Empire and Selling Franchises was the previous entry in this blog.

What Your HR Staff isn't Documenting is Costing You Money is the next entry in this blog.

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