Why Your Franchise Sales Process Is a Disaster, Part 4
Editor's note: This is part 4 of a serialized version of a recent e-book from Franchise Performance Group called Why Your Franchise Sales Process Is a Disaster: What a breakthrough franchise sales process looks like. Click here for part 1, here for part 2, and here for part 3.
Phase Five: FDD review
A franchise attorney once told me that their franchise sales people use the FDD as a sales tool, but I don't think the FDD adds any emotional engagement to the buyer's process. In 30 years I have never had a franchise buyer say: "I was on the fence, but then I got your FDD. Now I'm ready to move forward."
In this phase, the franchise salesperson needs to take the "one-sided sting" out of the FDD and ferret out and resolve potential deal-killers. At the end of this phase, if the franchise buyer says to himself, "I don't like it, but I can live with it," the franchise salesperson did their job. To get there, the franchise salesperson should walk through the 23 items in the FDD and discuss what they mean. The franchise salesperson should highlight what the franchisee's responsibilities are under the agreement, and get agreement that the franchise buyer will carry out their duties. This phase can generally be completed in one conversation, but it may require a follow-up call.
Skilled franchise sales people can bring potential deal-killers to light and engage franchise buyers in problem-solving. They may even highlight areas that have given franchise buyers fits in the past, and then skillfully bring the buyer around to the mind-set of the franchisor, showing why the clause must read a particular way to protect the investments of the successful and compliant franchisees.
Unskilled franchise sales people email the document to candidates and hope they don't read it (or worse, share it with an attorney).
Phase Six: Validation
From FDD review we go into validation, which is conducted during multiple conversations over multiple weeks. During the validation phase, the franchise buyer is building up their financial model, talking to franchisees, and hearing from the horse's mouth the answers to questions like, "What does it take to win?" and "What can I expect from the franchisor?"
Skilled franchise sales people know their franchisees and facilitate conversations for the candidate with franchisees who have similar backgrounds, demographic territories, competitive situations, or who are producing results that are in line with the prospective franchise buyer's definition of winning. Because the candidates are setting up their financing strategies, skilled franchise sales people also network with highly responsive financing sources who understand the franchisor's business.
Unskilled franchise sales people tell the candidate, "Call the SBA and tell me what they say."
Phase Seven: Discovery day
As validation is winding down, many franchisors will invite buyers to attend a discovery day, where they meet the corporate leadership and hear where the chain is going. Buyers get a chance to listen to individual department heads talk about how they support and shepherd the franchisee's businesses, and they get a behind-the-curtain peek at tools and processes the leaders develop to help franchisees win.
Phase Eight: Decision time
Once the buyer comes back from a discovery day, it's decision time. We look for a yes or no answer in one to seven days. Then all that remains for the buyer to do is to sign the franchise agreement. The buyer's financing should be in place. The franchise salesperson leads a simple hand-off meeting between franchise sales and operations, and the onboarding process begins.
And that's what a good, solid, buyer-friendly process looks like.
Joe Mathews is a founding partner of Franchise Performance Group, which specializes in franchisee recruitment, sales, and performance. This is an excerpt from his recent e-book. Contact FPG at 615-628-8461 or firstname.lastname@example.org.
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