Objective: Qualify the prospect, build rapport, and establish the process
Length of conversation: 45 to 60 minutes
This is the third part of an excerpt from my book that focuses on the program review step of the franchise sales process. Part 1 introduced the program review. Part 2 looked at pre-closing. This week, in part 3, we look at how to wrap up Step 2 of "The Six Steps to Selling Success" that I've detailed in my book, Grow to Greatness.
Now it's time to conclude the program review by preparing your prospect for the next stage of investigation. Reconfirm their interest by asking, "How would you like to proceed? Good, you say you want to continue. Then the next step is to send you our franchise documents, referred to as the Franchise Disclosure Document, or FDD. Have you ever read an FDD before?"
If the answer is yes, gain additional insight by asking the candidate what they think an FDD is about, what they have learned, and what questions about the document still remain. If this is the first FDD your prospect will see, it's imperative to provide an overview in advance - how it came about, what its purpose is, and how to best review it. Set their expectations about the FDD from the start, or you are in for trouble! If you don't prepare your candidate properly for this large, complex document, you may shock them right out of the process. Here's one approach you might take:
"The Federal Trade Commission requires every franchisor to present an FDD to buyers interested in their franchise opportunity. An FDD provides a wealth of information and specific details about the franchise program. It's an extremely helpful document in understanding what the obligations of the franchisor and franchisee are in their relationship. It includes financial performance information providing you with earnings claims; itemized cost ranges for start-up; real estate assistance; our initial training agenda; reporting procedures; franchisee communication systems; annual conference and area meetings; and scheduled field visits.
"Most people are overwhelmed when they first read an FDD. They're thick, extensive, and repetitious. It's a great cure for insomnia, so brew the coffee and get comfortable when you read it! You may want to review sections in intervals, rather than all at once. Be sure to make a list of questions as you go through it, so we can address each one in our next phone meeting.
"You'll notice that these documents are tough, one-sided, and biased. They certainly are, and for good reason. They are designed to protect the brand. They're written to safeguard the quality of products and services that make our franchise system so successful. The disclosure document protects the 98 percent of good owners from the few rebels who can slip into the program. If Joe is a Cold Stone Creamery franchisee and he's serving his grandmother's fried chicken, he has to stop. It may taste great, but it damages the brand and creates confusion at the other locations. If Joe refuses to comply, the franchise agreement allows the franchisor to throw him out of the system.
"Ask yourself if this agreement is fair and reasonable, since it is non-negotiable. By law, special material changes can't be made for you unless they are unilaterally provided to all other franchisees in our system. You have to feel comfortable with it just as our current franchisees are.
"Some business buyers are intimated by a franchisor's requirements for uniformity of systems and procedures, and that's perfectly okay. It just means they are not a candidate for any franchise and should start up a business on their own. Does that make sense?
"Let's set our next telephone appointment now for our Disclosure Review. I'll Priority Mail the FDD so you'll get it in the next day or two."
Book this next meeting in six to seven days. Also, many companies now send FDDs electronically for instant delivery. FTC-approved electronic document services are available should you be interested. FranServices.com is one of the pioneers in providing this service.
After scheduling next week's meeting, if the prospect is a "no show" for your appointment, wait a day and call thanking them for their interest and wishing them the best of success in their future endeavors. If they return your call with a sincere apology, let them know they will be disqualified if they miss a future appointment without prior notification.
This is an excerpt from my Amazon.com best-selling book, "Grow to Greatness: How to build a world-class franchise system faster." To order copies, click here.
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