FSBO - For Sale by Owner
By Michael J. Childs
Are you the Owner, Founder, and Sales Department for your franchise opportunity? Thinking about franchising your business and planning on handling sales yourself?
Then this article is for you.
It is common for homeowners to try and sell their home to save on the Realtor’s commission. But it’s just as common to see the sign in the yard replaced by a Realtor’s sign.
The homeowner wasn’t able to sell it.
Unless you’ve done it before, successfully marketing and selling your own home is hard to do. And the longer it sits on the market, the harder it is to sell. Sellers know this and call in the experts before the listing goes stale.
Selling your own home is the closest comparison to selling your own franchise opportunity. It’s a big ticket item, emotions are involved, and both can be a life-changing event. When someone buys your franchise, like a home, they may be handing you their life’s savings.
The good news? If you have an attractive offering and position it right, franchise sales are not that hard. You can sell your own franchise opportunity and keep the commissions.
Here are some tips things to keep in mind.
The FDD and Franchise Agreement
I put this first because a generic, boilerplate FDD and Franchise Agreement copied from a similar, established concept make it as difficult to sell a franchise as trying to sell a home full of clutter with an overgrown yard. Whether you, an attorney or franchise development firm wrote them.
Even when right the legal documents will filter out some buyers. With a startup franchise, the last thing you want is heavy-handed, fee-heavy documents full of legalese gobbledygook that nobody but attorneys can decipher.
If you have difficulty understanding what is in your FDD and Franchise Agreement or wonder if you would actually buy this franchise, so will your buyer. If that’s the case, you should fix this first.
If you haven’t yet, come up with a repeatable sales process that you use every time so you can gauge how successful it is. You can’t just hack around.
If you respond to prospects immediately when they contact you, do that every time. After a month (or at least 10 inquiries) if you are not getting through to them, then tweak the time before contact to say a day or two, and try that for a month.
Do the same thing with email or text responses. You can have an autoresponder letting them know you got the request for more information right away, but then decide when, or if you want to send them a personal email.
Sometimes text works best, sometimes calls, sometimes emails or all three. You’ll never know if you don’t test each method and give it enough time to work.
The important thing is a sales process that you repeat with every prospect until you learn what works.
Third Party Compliments
"Without promotion, something terrible happens... nothing!" ~ P. T. Barnum
Self-promotion is exactly what you have to do if you are selling your own franchise opportunity. The trouble is unless you have the P. T. Barnum gift of gab, it is hard to pull off without it coming off as bragging.
Enter third party compliments.
A third party compliment is when you pass along good news or praise heard from another source. When you get one, it’s the best compliment you will ever receive.
You can tell franchise buyers directly that you are an honest person with an exceptional franchise opportunity and world-class support. And it can be entirely true. But it’s going to be at least taken with some skepticism.
But if someone else tells them how impressed they are with your honesty, exceptional franchise opportunity, and world-class support, it has the power of a third party compliment. That’s why franchisee validation is so important.
If you don’t have any franchisees yet, it’s even more important to get someone else to be the first contact with the potential buyer, and let them do some bragging for you. You can decide when to jump in.
Even if you have franchisees in the system, you will have more success if you are not the first contact in the sales process.
It’s Your Baby
When first starting out, feedback equals success. But most people won’t say anything bad about your franchise offering directly to you. After all, it’s your baby.
Sort of like third part compliments in reverse, prospects would much rather tell someone else who will pass the bad news on. But if there is only you in the sales process chances are you’ll never hear the things you need to hear to fix what is broken.
Not to mention franchise buyers are notorious for not telling sales staff the real reason they lost interest, much less the owner and founder. If you are on your own, trying to figure out why buyers stop returning your calls or make up lame excuses not to buy can drive you to near insanity.
This is another great reason to have someone else in the sales process other than you. If you don’t have someone to do that for you, we offer an inexpensive Prospect Qualification service that works well for just this purpose.
Bet You Can’t Sell Just One
I doubt you will read this anywhere else, but if you start selling franchises, you absolutely must keep selling franchises. It may seem counterintuitive, but if you are struggling to sell, it is much better not to sell any in the first place.
If you sell a few and then stall, you’re stuck.
Lowering the franchise, royalty or other fees, or offering other concessions like larger territories, two for one deals, etc. to attract buyers dilutes the value of existing franchises.
Your existing franchisees will feel betrayed and question their investment. That’s when they typically stop paying royalty or just quit altogether. If they do hang on, they will be lousy validators.
Stalled franchise offerings can be successfully restarted; I know how to do it. But it does up the degree of difficulty. It is much easier and costs less - to fix, tweak or even completely redevelop a franchise offering before you sell any franchises.
If you are stuck or having trouble selling give me a call. First consultations are free and it may not take much to get you going again.
I can help you franchise your business for less. Call me anytime at 321.392.3000 X 1 or schedule a free call.