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.
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.
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. As a matter of fact when everything is right, the number of franchises you sell is just a function of advertising dollars. The more you advertise, the more franchises you sell.
With a little help, you can sell your own franchise opportunity and keep the commission you would otherwise have to pay out.
Here are some tips to keep in mind.
The FDD and Franchise Agreement
I put this first because a generic, boilerplate Franchise Disclosure Document (FDD) and Franchise Agreement copied from a similar, established concept make it as difficult to sell a franchise opportunity as trying to sell a home full of clutter with an overgrown yard. Whether an attorney or franchise development firm wrote them.
Even great legal documents will filter out some buyers. With a startup franchise, the last thing you want is heavy-handed, fee-heavy legal 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 buy your franchise, so will your buyer. If that’s the case, you should fix this first.
If you haven’t yet, set up with a repeatable sales process that you use every time so you can gauge how successful it is.
If you respond to prospects immediately when they contact you, do that every time. If you are not getting through to them, then tweak the time before contact to wait a day or two, and try that for a while.
Unless it is a direct lead from your website, I find that waiting a few days before the first contact works best.
When the prospect comes from a franchise opportunity portal, they most likely asked for information from other franchise opportunities at the same time. They are usually bombarded by your competitors right after they submit the inquiries, and can get overwhelmed, . Your message could easily get lost in the clutter and confusion.
Use the same, repeatable process with email and text responses if you plan to use them. You should have an email autoresponder letting them know you got the request for more information. Then decide how long you want to wait before you send them a personal email and text message.
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 repeatable sales process that you use with every prospect until you learn what works. How you set up the initial and other calls, whether you use a webinar or not, sending printed brochures or keeping everything electronic are also things you’ll need to repeat, test and tweak.
Third Party Compliments
"Without promotion, something terrible happens... nothing!" ~ P. T. Barnum
Self-promotion is precisely 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 one of the best compliments you will ever get.
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 accurate. 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. Your existing franchisees are the perfect third party compliment givers.
If you can, try to have someone else be the first contact with your candidate and let them do some bragging for you. You can decide when to jump in. You will usually have more franchise sales success if you are not the first person your prospect talks to in the sales process.
It’s Your Baby
When first starting, 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 and you’re not closing deals, 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.
Separating the real buyers from the just curious is another great reason to have someone else in the sales process before you. If you don’t have someone to filter out the buyers from the lookers, we offer an inexpensive Prospect Qualification service that works exceptionally well.
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 franchise sales stall, you’re stuck.
Lowering the franchise fee, royalty or other fees, or offering other concessions like larger territories or two for one deals so you can close franchise sales dilutes the value of existing franchises. Your franchisees will feel betrayed and question their investment. That’s when they typically stop paying the royalty or just quit altogether. If they do hang on, they will be lousy validators.
Stalled franchise offerings can be restarted. I’ve done 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 opportunity that wasn't positioned right before you sell any franchises.