Franchise Sales Rhythm
By Michael J. Childs
I know I don’t need to tell you this, but the Internet changed everything.
And it has completely changed how franchise buyers research and buy franchises, morphing into a process that a lot of franchisors, salespeople and even consultants haven’t kept up with.
But if you understand the way prospects research, learn about and buy franchise opportunities, you can do things to make sure your sales process is in sync with their buying process.
If you can match your sales rhythm to your prospects buying rhythm, and focus on a friendly exchange of information, your life will get a lot easier and you will sell more franchises.
The first few stages are typically buyer driven, with the later stages mostly controlled by you.
The Research stage is when real prospects start collecting information about franchise opportunities. During this stage, you don’t know they exist. It is the beginning of the buyer’s process, and your website and other information on the Internet are their primary source of information.
The reason I say “real prospects” is because you’ll get calls from those that are just curious without doing any homework first, with a zillion questions that are already answered on your website. For the most part, those aren’t real buyers and a waste of your time.
Most candidates quit during the Research stage without ever contacting you or speaking with someone in franchise development. Some research for years, some for a day or two. That is why your website and content is so important.
2. Request for Information
A request for information happens at some point during the Research stage. Prospects are willing to give you their contact information in exchange for inside information about your franchise opportunity.
Contacting you for more information doesn’t mean they are ready for a sales pitch. They are still collecting information. Other than a short email auto-responder letting the prospect know you received the request for more information, I recommend that you make every other contact with them personal.
It's best if emails are sent by a person with a return address, and phone calls come from someone who answers their own phone.
I like to add a human (other than the salesperson) into the mix with a personal, zero-pressure touch, and a brief phone call leaving contact information they can use to get back to us. The goal is to let your prospect know you are interested in them without bugging them.
If they have an interest in learning more, it’s best to give them enough time and enough space to let you know.
3. Reach Out
Candidates that reach out to you most likely found something persuasive enough in their research to be willing to have at least a first conversation about the franchise concept. The Reach Out stage doesn’t mean they are ready to buy. It is just the first real step toward learning if the franchise might be a fit.
They want to get a feel for the culture, find out if they are qualified financially or otherwise, and whether there are territories available in their area, etc., to keep from investing time into something they can’t afford or isn’t available.
During this stage, you can continue to let the first contact person answer some of the initial questions and to set up a time for the first real conversation, or you might want to reply yourself. I’ve done it both ways, and they both seem to work.
4. The First Conversation
The first conversation is the beginning of the actual “franchise sales” stage. Don’t be surprised if your buyer already knows a lot about your offering, and asks detailed questions based on their research. Today’s buyer, with all the resources available to them, can actually make your job more comfortable because they already know so much. They carry computers around with them after all.
The first conversation shouldn’t be a breathless features-and-benefits-information-sales-dump, when what your buyer really wants are answers to specify questions.
There will be follow-up conversations where you can build on the previous calls with the information they want to know, and also begin to educate your buyer on what it takes to be successful with your business model. For example; what makes you different, what a day in the life of a franchisee is like, the competition, support and so on.
A good thing to keep in mind is with all calls or contact with your buyer, try to focus on just getting to the next step, not the end result.
I like to give out the Franchise Disclosure Document (FDD) early in the sales process and suggest you do too. But I don’t just dump it on them to fend for themselves. Even the most well-written FDD can seem pretty one-sided.
Make sure you set up a time to go over each Item with them. Using the Bad News First rule, give your prospect a heads up on anything that might filter them out, and explain that provisions they might object to are there to protect them and the franchise system.
By the way, waiting until the bitter end to send the FDD hoping they don’t read it is a terrible idea. You want them to read it and understand it. Those that take the time to understand what they are buying make the best franchisees. It’s to your benefit to get it out there as soon as possible.
On the other hand, if you have a generic FDD full of legalese gobbledygook you hope they never read because you’re afraid it will kill the deal, that’s an entirely different subject. Poke around this website for more on that subject.
With the FDD, they will have a list of current and past franchisees. You should encourage them to contact as many as they like. If there are existing franchisees that match up well with your prospect such as those that came out of the same corporate structure, have similar backgrounds, etc., make sure they contact those.
Basically, you want them to contact enough franchisees so they can hear from the ones that are performing up to your prospect's expectations, and the ones that aren’t. With that information, they can decide who they are more like. The winners, or the losers.
Some prospects try to jump ahead on validation (pre-FDD) by calling your existing franchisees using contact information from your website. There are some reasons for this. They may want to shortcut the process and gauge the overall satisfaction of existing franchisees in the system or don’t want to jump through the franchise sales process hoops.
Whatever the reason, it’s best not to allow this to happen if you can help it. Not because you have something to hide, but it is a huge time suck for your franchisees who are now talking to someone that may just be curious, even a competitor when they have their own business to run. Not to mention, those that jump ahead are rarely real buyers.
I make sure to bring validation calls up during the first call by asking my prospect to wait until they receive the FDD and know enough to ask the right questions, reminding them that should they become a franchisee themselves they will appreciate the same courtesy
7. Discovery Day
If validation goes well, it’s time to invite your prospect to Discovery Day. Discovery Day is an excellent opportunity to meet your buyer in person, and for them to meet the decision makers and day-to-day operations and support staff. I highly recommend you have a Discovery Day.
Discovery Day isn’t selling. Selling is over, validation completed, and the FDD and Franchise Agreement already reviewed by the buyer’s attorney. If needed, financing is pre-arranged. Discovery Day is usually the only time the buyer will get to meet face-to-face with the founders, decision makers and so on, so make sure you have a well thought out, planned format.
8. Yes or No
I can’t remember a time when I didn’t sign someone up during Discovery Day. I already knew so much about the buyer, and they already knew so much about us, neither needed any more time to make a decision other than the face-to-face meeting to confirm what we already knew.
The takeaway is that we were ready. There was nothing in the way of closing the deal. Documents were completed ready for signing, and the buyer knew in advance that if things went well entering into an agreement when they were there was expected.
If they balk at that idea, you may want to postpone Discovery Day for that prospect. Discovery Day is the perfect time to close the deal, and that should be your goal.
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