The Franchise Sales Process
I titled this article the franchise sales process, but this process is more accurately referred to as the mutual evaluation process. Semantics is the first step to a correct mindset about this process. You see, if you are trying to “sell” your franchise, you may end up with the wrong candidates in your system! As any experienced franchisor can tell you, one “wrong” franchisee can wreak havoc in an otherwise strong system. For a young franchisor, if one of your first franchisees is not a good fit, they can devastate your system and stunt your growth for years to come. So lets agree to call the franchise sales process a “mutual evaluation process”, shall we?
HAVING A PROCESS
The first key to a successful mutual evaluation process is to have a process! While this may seem obvious, we have interacted with many young franchisors who simply answer the phone or call the leads and talk about their brand, send out a Disclosure Document when they “feel” like the time is right, and basically provide a reactive sales experience to the candidate. The problem with this is two fold.
You are the expert
You are the expert in this business. You know (or should know) what information your candidate needs to make an informed decision in a timely manner, and how they get that information. If you are simply reacting to what your candidate is asking for, you likely will have a longer mutual evaluation process, and may well lose your clients due to lack of comfort in your brand.
You need information
Your candidate is interested in the information they need, not the information you need. However, like them, you are considering entering into a long-term business engagement, and you also need to do your due diligence. A good mutual evaluation process is a consistent give and take, where both parties are able to learn more and more about each other as the process continues.
DISCLOSING THE PROCESS
Have you ever noticed the first time you take a trip it seems much longer than any subsequent trips to the same place? You are also much more likely to take a wrong turn that first time, or get distracted by other stops along the way. That’s because you know what to expect, you have landmarks you recognize, and you can keep track of where you are. If you don’t communicate your mutual evaluation process to your candidate, they are also more likely to take a wrong turn or get distracted. By having a clearly defined and communicated process, your candidate knows what to expect and has landmarks along the way. This will allow you to guide them through the process with more efficiency, and allow you both to reach a decision quicker.
DOCUMENTING THE PROCESS
The mutual evaluation process should be well documented. You should have initial qualification scripts, a detailed outline for your Program Review and FDD Review, a list of objections with answers, a list of red-flags, and guidelines to set up for Discovery Days, store visits, and interviews. By documenting the process, you are able to maintain consistency and candidate experience as you expand or if key personnel leave the company.
TRACKING THE PROCESS
It is important that you are using a robust CRM that allows you to track a candidate’s steps through the process, and pull detailed reporting on pipeline, lost deals, and bottlenecks. Understanding where people are getting hung up, or at what part of the process a particular sales person is struggling, will allow you to modify your process or training to react to these issues.
WHAT ARE THE STEPS?
The franchise sales process or mutual evaluation process must be tailored to your unique brand and current market position. When you ask for an application, when you allow candidates to talk to franchisees, and when you provide your Disclosure are all affected by your brand strength, investment, and complexity. Here are the general steps for a strong mutual-evaluation process. Keep in mind that your actual process should be much more detailed than this, with sub-steps in each section.
This is the initial call or two where you and the candidate learn precursory information about each other, and make sure that, at least at a high level, there is some modicum of interest in working together.
During this time you will provide your candidate with more detailed information about the franchise, including what a day-in-the-life looks like, investments, potential returns, industry outlooks, etc. This process will likely include some combination of phone calls, web presentations (webinars), and in-person meetings. You will also be learning more about your candidate through well-formulated open-ended questions, and possibly an application.
This process is where your candidate will validate what you have told them through investigation, speaking with your franchisees, visiting locations, and reviewing your Disclosure Document. You will validate what you have been told be taking an application (if you haven’t already), checking references, and performing credit and criminal checks.
This is the final step. The closing process often includes a Discovery Day at corporate, an Executive Interview, and a final closing call.
THE END GOAL
The end goal of your mutual evaluation process should be to allow both you and your candidate to make an informed decision in a reasonably quick time frame. The entire process often takes from 5-12 weeks. It is important to remember that there is no such thing as the perfect franchisee or the perfect franchise model. The goal is to find out if you are perfect for each other!
If you want to learn more about how to set up a mutual evaluation process, or if you want to talk to us about your current franchise sales process, don’t hesitate to reach out. Of course, as always, if you want to learn more about how to franchise a business, Franchise Beacon is your key resource!