The Franchise Sales Process: Who Should Be Involved?

I wrote The Ultimate Guide to Franchise Sales about a year ago. It covers, at a high level, the entire franchise sales process. This is the third in a series of articles that will cover several of the subjects from the guide, with a narrower scope and deeper dive.

If you are a franchise development professional, you probably feel like you are on an island. Franchise development is a unique division within a franchised organization.

As a CDO, VP of franchise development, or director of recruitment, you probably have finance pushing for projections, the board pushing for new franchisees, real estate pushing for fewer franchisees, training and support pushing appropriate timing to get multiple franchisees into the same class, and franchises pushing for brand growth, but don't you dare encroach. Talk about getting pushed around!

The adversarial nature of these interactions is not one that can or even should be eliminated. However, by involving every one of these individuals and departments in your franchise recruitment process, you can release a little of the tension. I'll work backward through that list and show you how to wrap each of these seamlessly into your development process, and, in so doing, enhance the overall process and the new franchisee experience.

The franchisees

Let's start with the franchisees. Franchisees can be your biggest advocate or your biggest roadblock in the franchise sales process. If your franchisees are consistently talking prospects out of your brand because they don't make money or see other fundamental flaws in your brand, STOP and go fix it. You can't, and shouldn't, sell around validation. However, if franchisees seem to validate well one day and not as well another, or if prospects are just having a hard time getting them on the phone, you will make your life so much easier by just getting franchisees on board. Do your franchisees know your company's vision? Have you talked to them about the benefits of brand growth? This seems obvious, but it is easy for a franchisee to get caught up in their four walls and forget about the value of a greater brand. How do you overcome this?

1. Franchise development should have a full time slot at your annual conference. Your franchisees should fully understand your franchise sales process and at what stage of discovery prospects are likely to call. Additionally, explain to your franchisees what your development department does to ensure that prospects are instructed not to reach out until they have entered the appropriate stage.
2. I recommend asking your franchisees not to engage in validation unless they have been directly introduced to a prospect so they know the candidate has been properly vetted. If the franchisees know that you respect their time, they will be more likely to speak with your candidates.
3. Talk to them about how growth helps the system. Be as specific as you can. Here are three things I have personally addressed at various conferences:
   • Heightened brand recognition. I had two different franchisees talk about how an increase in market presence helped their business. Having a peer tell them their business had quantifiably increased when new franchisees came into the territory was a game changer.
   • Show specific examples of negotiated rates that have changed because of brand growth.
   • Show specific examples of agreements with vendors that have a lower unit cost when thresholds are met.
4. Thank them. Don't overlook this one! When a candidate tells you about a particularly informative call with a franchisee, reach out to the franchisee and thank them for sharing their story.

Training and support

Training and support should be directly engaged with your prospects. I recommend a call with department heads, individually or jointly, either before or during the validation process. This is a huge value-add for your prospect and a triple play for franchise development. First, prospects will see that you have a culture of transparency, which should lead to them being more comfortable investing in your brand. Second, by speaking with individuals who are responsible for training and support, they start to picture working with these folks, thereby beginning to take possessive ownership of the franchise. Finally, your training and support staff will see the candidates as real people with real needs, so being flexible on training class dates or making other accommodations will feel more natural internally as well. Engaging training and support in your sales process will move your candidates through the pipeline faster.

Real estate

The real estate department's involvement in sales is a delicate balance. If candidates become too invested in real estate before franchise agreement execution, they may delay moving forward until they have found the "right" real estate. Unless preapproval of real estate is part of your model, the Real Estate department shouldn't be reviewing potential leased sights until a franchisee is on board, so this becomes a "Catch-22." However, I do encourage brick-and-mortar franchise organizations to have the real estate department review a candidate's area of interest during the validation process. This serves two purposes: 1) real estate is able to get a high-level overview of the area so they start with a base level of knowledge after the franchisee signs, and 2) they may spot potential problem areas before signing. If an initial environmental scan renders few or no viable real estate options, you should address this issue and potential solutions with your candidate - before signing.

Budgeting & the C-suite

As a CDO, it is your responsibility to set realistic expectations with the folks at the helm of the company. Shutting down unrealistic development goals is a must. Franchise sales is math: budget + time to close = projections, period. Also, budget notwithstanding, a franchise organization should only grow so fast. In a "hot" industry, keeping the reins on franchise sales while still taking advantage of growth opportunities is what sets apart the true professionals.

 Michael A. Peterson is president of Franchise Beacon, a full-service franchise consulting company, and author of the Amazon best-seller How and Why To Franchise Your Business. Contact him at 949-282-7304.