How to Sell Franchises
When considering the target Franchise profile, we look at a number of relevant issues related to who we want to be operating franchises of our business.
Typically, if you consider who you might hire to manage a location of your business and would entrust the operational responsibilities of a “unit”, these same characteristics and traits should be inherent in a franchisee.
Some of the skill sets we have found to be consistent among successful franchise owners are the following:
· Typically, franchisees should exhibit strong sales and customer service abilities – they preferably should have sold similar products or services in the past which relate to what they will be doing when opening the franchised business model. It would be helpful if they also have some preexisting business contacts as well – which they can call upon when the business is opened and utilize to support its growth.
· Hard working and Highly Self-Motivated – even in the Franchise model, someone’s drive and commitment to success will determine how well they do as a franchisee.
· Organized and Structured – Franchise Candidates who have shown the ability to manage, organize and lead will typically be more successful as a business owner.
· Some aptitude with technology – Good candidates for your franchise model will know and understand the basics of technology enough to grasp and understand how to manage communication through email, virtual teleconference and smart phone applications. In today’s day and age, these skills can be as important as ever to communicate with a wide-ranging network of franchisees.
· Well-developed people skills – strong relationships with affiliates, suppliers and between franchisor and franchisee will help franchise owners be successful and build their business.
· High personal standards: excellence, honesty, integrity, etc. – credit and background checks should be run on candidates to confirm that they are decent candidates. They will be required to fill out applications that will determine whether they meet minimum specifications as a Franchise.
· Able to meet initial investment requirements – a franchisee ultimately needs to be able to cover the expenses and investment needed to start the business and operate the model for three months without cash flow from the operation.
Throughout the sales process, there should be a structure that requires the buyer to “Give to Get”. This concept is simple, to continue through the sales process, the buyer must provide feedback and show commitment to the franchise buying process in order to be progressed through the model. This could be as simple as requiring the franchisee to fill out a single application and evaluation form, or as complex as having them go through background screening, credit checks, personality testing and multiple franchise evaluation forms.
We recommend at a minimum a single evaluation form, that provides the Franchisor (YOU) with enough information to get a basic understanding for the candidate’s ability, work history and skill set. The form should also have a sign off providing the Franchisor with the ability (legally) to run a credit check on the candidate.
You should absolutely verify financials. Many franchise candidates will say they have the funding because they want the franchise and not necessarily be telling the truth. You need to verify this as the franchisor to protect your system and their future. Starting a franchise without the needed capital is usually a recipe for disaster.
Use the evaluation as a selling tool. “We need to get to know you better and this will carry you into the next stage of the process with us.” In our experience, buyers won’t send an evaluation form in until they are serious and relatively commited to a franchise concept. It is a very good sign to receive an evaluation form that the franchisee is looking seriously to buy.
Five Good Reasons
An excellent way to be clear on why anyone should buy our Franchise is to develop a list of three to five good reasons as to why an investor would buy into your Franchise system. These will be your key points as to what the value of your franchise model is and these should be reiterated in all of your Franchise marketing communications.
Here are Five Possible Good Reasons as a Reference Point for a Franchise model.
- Strategic Partnership with vendors and suppliers in place – big brand and big resources behind this business model.
- One of a kind business model and service suite to be offered to business owners in your market available through the systems and technology we have in place.
- A Business Model that allows for scalability without the initial investment of a traditional business with recurring revenue from continuing services – “sell it once and continue to see the revenue”.
- Market with unlimited growth potential
- Training, support and guidance that has been designed, customized and tailored to fit each franchisee’s needs. We stand behind our franchisees to the fullest extent and have a team of professionals fully committed to franchisee’s success.