Franchise Sales Rhythm
By Michael J. Childs
I know I don’t need to tell you this, but the Internet and smartphones changed everything.
And it has completely changed how franchise buyers research and buy franchises, morphing into a research and buying process that many franchisors, salespeople and even franchise consultants haven’t adapted to.
But if you understand the way prospects research, learn about and buy franchise opportunities in today’s market, you can do things to make sure your sales process is in sync with their buying process.
Then you can match your sales rhythm to your prospects buying rhythm. You can then focus on a friendly exchange of information instead of a sale pitch, which will make your franchise sales life a lot easier, and you will sell more franchises.
Here is how most buyers seem to move through the buying process. The first few stages are typically buyer driven, with the later stages mostly controlled by you.
The Research Stage
The Research stage is when 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.
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 online content is so important.
Request for Information
A request for information usually happens at some point during the Research stage. Prospects are willing to give you their contact information in exchange for additional information about your franchise opportunity.
Contacting you for more information doesn’t mean they are ready for a sales pitch. They are still collecting data. 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.
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 without bugging them.
If they have an interest in learning more, it’s best to give them enough time and space to let you know.
The Reach Out Stage
Candidates that reach out to you most likely found something persuasive enough in their research to be willing to have 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 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 with the sales department, or you might want to reply yourself. I’ve done it both ways, and they both seem to work.
The First Conversation
The first conversation is the beginning of the actual “franchise sales” process. 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 make your job easier because they already know so much. They carry computers around with them all day 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 their 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, initial training, and ongoing support.
Try to focus on just getting to the next step in your sales process, 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 a well-written FDD can seem pretty one-sided in favor of the franchisor.
Make sure you set up a call to go over each Item in the FDD with them. Using the Bad News First is Good News 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 as well as the entire 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. Candidates that take the time to know what they are buying make the best franchisees.
The Validation Stage
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 or have similar backgrounds try to make sure they contact those first.
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. They can then decide who they are most 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. They may want to shortcut the process and gauge the overall satisfaction of existing franchisees in the system before contacting you or don’t want to jump through the franchise sales process hoops.
Whatever the reason, it is best not to allow this to happen. 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 try and jump ahead are rarely real buyers.
I make sure to bring validation calls up during the first call with my candidate by asking them to wait until they receive the FDD and know enough to ask the right questions when they call existing franchisees, reminding them that should they become a franchisee themselves they will appreciate the same courtesy.
If validation goes well, it’s time to invite your prospect to Discovery Day. Discovery Day is an excellent opportunity for you to meet your buyer in person, and for them to meet you, the decision makers and day-to-day operations and support staff.
Discovery Day isn’t selling. Selling is over, validation completed. The FDD and Franchise Agreement already reviewed by the buyer’s attorney, completed and ready for signing. 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 and decision makers, so make sure you have a well thought out, planned format and agenda.
I highly recommend you have a Discovery Day or Meet the Team Day.
I can’t remember a time when I didn’t sign a franchise agreement with a prospect 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 yes or no 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 completed and available for signing, and the buyer knew in advance that if things went well, they would be entering into a franchise agreement while they were there.
If you have managed the sales process right, your buyer will be at their emotional peak, making Discovery Day the perfect time to close the deal.