Discovery Day: Accelerate Your Closings
Executive review committees are typically composed of senior franchise executives who review a candidate's qualifications before granting them a franchise. If you are a founder just starting up your franchise, employ a close business associate, franchise consultant, or other trusted advisor to be a part of your committee. They can help in your decision-making process, and provide greater credence to your professionalism.
It is the committee's decision at the conclusion of Discovery Day whether to extend a franchise offer or disqualify a candidate. Successful franchisors prominently position this venue as the final qualifier in granting new franchises to prospective buyers. It's a legitimate "country club" approach that helps safeguard the future of both the organization and prospective franchisees. Here's what your committee of advisors must answer: "Is this individual a good fit who can be successful and a contribution to the system?" or "Is this a person who really doesn't match your franchise profile and will probably create problems for both of you down the road?"
For franchisors using Discovery Day as "signing day," committee-approved candidates sign agreements and pay their franchise fees at the conclusion of the event. Celebrate this memorable occasion with your congratulations, photo shots with senior executives, and company logo gifts. Now the franchisor and franchisee join together in their journey to build a rewarding business partnership.
Turning down Discovery Day candidates
It's not a pleasant moment when you inform your prospect they are rejected by your review committee. Out of respect for the candidate, it's imperative to give the specific business reason(s) why. Just as you want to know why qualified prospects pass on your opportunity, these prospects deserve the same from you. Legitimate reasons can be: "We are concerned you don't have the necessary social and networking skills demanded for our concept." "Our training people believe you will be overwhelmed with employee management, hiring, and training responsibilities." "Executive management has decided you aren't currently in a position with your heavy family commitments to dedicate the 12-hour days and energy to start up your business." "The consensus is that our franchise procedures and policies are too restrictive for you and will frustrate your ability and motivation to grow within our organization."
Make it clear that your particular franchise simply isn't right for them, and explain why. If you care about the welfare of the individual and your franchise system, disqualifying candidates is not a personal attack on the candidate. I've certainly had the displeasure of delivering bad news. A wonderful, physically challenged woman who qualified in all other aspects was rejected because it was evident at Discovery Day that she didn't have the energy or stamina to operate our fast-paced business. Another gentleman had difficulty communicating with our operations and training executives, which would affect his learning potential as well as unfairly burden our support team.
My toughest rejection was disqualifying a proud husband without the skill sets to manage the franchise. However, we were blown away by his wife's business acumen, personality profile, and passion for our concept. We said we would award the franchise if his wife would join him full-time as co-operator of the business. Unfortunately, the husband flatly rejected the idea. He still carried the mindset of his traditional culture, which prevented him from agreeing to our requirements.
Post-Discovery Day signings
Most franchisors approve candidates and award franchises immediately after the event. The intent is not to sign up new franchisees at Discovery Day. If you're wondering, there is no right or wrong way. In successfully using this post-award process, the key is to contact the buyer the day after Discovery Day and lay out the steps to signing. I've seen time, indecision, and lack of follow-through kill post-Discovery Day deals.
Executive leadership must give franchise closings top priority within their organization. Losing a five-store, multi-unit deal because it took three weeks to get the territory defined and contracts out is utterly tragic. Time kills deals. Buyers expect responsiveness, are highly impressionable, and can be easily diverted when too much time elapses. This is nothing less than we'd expect for ourselves.
Here are some quick tips to accelerate your closings:
- Immediately after committee approval, call the candidate with the good news and email a confirmation letter with timelines for signing papers.
- Extend a maximum one-week offer for your franchise. If legal review needs completion, provide a few extra days. Keep the schedule tight, otherwise franchise attorneys may give this assignment a low priority and unnecessarily drag out their review.
- Set a date and time for a telephone closing, or an office closing if the candidate is local. This keeps the sale in motion. It also ensures your new franchisee signs the documents properly, avoiding delays because of pages incorrectly completed.
- Provide your overnight delivery account for returning their signed agreements.
- Countersign documents the next day, congratulate your new franchisee, and confirm their next step in starting up the business!
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.
Share this Feature
Comments:comments powered by Disqus
- Multi-Unit Franchising
- Get Started in Franchising
- Open New Units
- Featured Sponsored Articles
A targeted, quarterly magazine that takes CEO's, VPs and Sales Executives to the cutting edge of franchise development.