Boosting Year-End Franchise Sales

Sales pros offer tips and tactics for closing out 2008


On the Friday morning after Congress voted down the first, "unsweetened" $700 billion bailout package--and with credit frozen and the lending climate getting icier by the hour--franchise sales executives at Franchise Update's Leadership & Development Conference put their heads together in a Friday morning "mindshare" session to brainstorm answers to some tough questions on what they're doing to make sales.

No matter what the economic environment, franchisors still must sell franchises if they are to grow and thrive. To do that, the majority of franchisees must be able to borrow, whether to start up or to expand existing operations. But with credit and lending frozen, nobody can borrow. So what's a franchisor to do?

That's exactly what Tom Wood asked more than three dozen franchise owners and sales executives in Chicago in late September. Wood, president and CEO of Floor Coverings International, asked attendees to answer the following question as they approached the last quarter of 2008:

"As a group, what are one or two things you can do right now to drive more results in the next 12 weeks?" Here's what they had to say.

1) Work with lenders

  1. This includes lining up financing in advance--and staying in touch with lenders as their requirements change. As the economic environment shifts like sand under their feet, bankers may cut back on lending to a specific industry segment (QSR, for example), or to a specific brand if its sales decline. Just because you had an agreement with a banker or lender in October doesn't mean it will be there when a franchisee shows up for a loan in November or December--whether to open their first unit or to add a second, third, or fourth unit.
  2. Prepare lender packages that franchisees can take to the bank. Bankers like certainty and security--especially nowadays. Equipping franchisees with a solid report on your concept's finances makes it easier for lenders to say yes--and provides your franchisee with added confidence throughout the borrowing/lending process.


2) Target customers

Targeting customers as prospects is preaching to the choir. They already like your product or service. Although being a great customer usually doesn't translate into becoming a great operator, the chances of finding enthusiastic candidates are greater than from the leads delivered by your own website, portals, and other online sources.

3) Poll top franchisees

Profile your best-performing franchisees to see if they are interested in opening additional units. They've already proven themselves, so they know the system, deliver the goods (or services), and may be ready to expand. Work with them not only on financing, but on training them to be multi-unit or multi-brand owners.

4) Push referrals

If your top producers are not ready to add units, they often are an excellent source of referrals. They're your eyes and ears in the field and can help you size up customers and acquaintances who might have the right stuff to become a good franchisee (as long as they don't open up close enough to cut into their market share).

In fact, the number-one tactic mentioned for finding qualified prospects was referrals. Franchisors with incentive-based referral programs drew a lot of interest from sales execs interested in introducing or restarting a program of their own. With monetary incentives for successful referrals, which can vary from cash to discounts on supplies (check with your attorney), franchisees were glad to place sales collateral in their stores and talk up the brand. The cost per referral (averaging in the $1,000 range) is low compared with brokers; and the percentage of qualified applicants much higher than with online leads. And, as one franchisor noted, referrals can happen without an incentive program. "The cost is nothing if you don't want it to be."

5) Straight talk

Sales people are natural optimists. In these tough times candidates want to hear the truth. Don't paint an unrealistically rosy picture--it's tough out there. Even "recession proof" services such as hair salons are seeing a decline as customers wait longer between cuts and colorings.

6) Attend career fairs

Quaint as these may sound, local career fairs are becoming a source of leads and deals as a growing portion of the gainfully employed are feeling uneasy about their future. And as layoffs and unemployment continue to mount, a growing number of serious, skilled professionals are looking for a new career, or at least a "Plan B."

7) Get back to basics

Many franchisors are taking this time to review their sales process from top to bottom. They're looking to find where it needs improvement--and they're mystery shopping their sales team to see if the process is being followed. Franchise Update's own mystery shopping (posing as a qualified buyer and phoning in and emailing to the 148 franchise companies at this year's conference, who represented 57,000 units) revealed such fundamental flaws as:

  • no callback within 48 hours (58%);
  • not taking a name (24%);
  • not taking a phone number (45%) or email address (40%); and
  • not asking for a time frame for buying/opening a franchise (67%).



Scary stuff in these uncertain times, when leads are down and each sale takes on greater importance to system-wide growth. (For more on lead generation and benchmarking your franchise sales process, check out Franchise Update Media Group's Annual Franchise Development Report,

Yes, times are tough and money is tight. It's not the economy stupid, it's the stupid economy. So get smart. Focusing on fundamentals, recruiting leads from every possible source, and keeping current with your lenders can help mitigate the pain.

Published: November 18th, 2008

Share this Feature

Comments:

comments powered by Disqus
ADVERTISE
SPONSORED CONTENT

Franchisor Topics »

Premium Services

Multi-Unit Franchising Conference Business Opportunity

Multi-Unit Franchising Conference
Make deals with the most powerful players in Multi-Unit Franchising. Our...

AXIS Integrated Business Opportunity

AXIS Integrated
With over 25 years of experience in the franchise industry, AXIS...

Proven Match Business Opportunity

Proven Match
Proven Match provides science-based insights and screening tools to...

919 Marketing Business Opportunity

919 Marketing
919 Marketing Co. is a national content marketing, PR and social media...

Franchise Consumer Marketing Conference Business Opportunity

Franchise Consumer Marketing Conference
June 19-20, 2018. Intercontinental Hotel, Atlanta (Buckhead), GA. An...

Scorpion Business Opportunity

Scorpion
Scorpion offers ROI-positive online marketing solutions that can get your...

Vya Business Opportunity

Vya
Engaging franchisees in local marketing takes more than just technology....

Best Franchisee of the World Business Opportunity

Best Franchisee of the World
Best Franchisee of the World will focus on the Franchisees, entrepreneurs...


Franchise Update Magazine

A targeted, quarterly magazine that takes CEO's, VPs and Sales Executives to the cutting edge of franchise development.

Subscribe to Franchise Update Sales Report

A Franchise Update Media Production
Franchise Update Media | P.O. Box 20547 // San Jose, CA 95160 // PH. (408) 402-5681
Copyright © 2001 - 2017. All Rights Reserved.

In Loving Memory Of Timothy Gardner (1987-2014)