Franchising

When selling new franchises the franchisor should want their prospects to have confidence in their ability to operate the franchise. To achieve this objective, franchisors should provide prospective franchisees the type of information that can lead the prospect to make the right decision. By following some simple steps, a franchisor can be in the position to attract more informed and qualified franchise prospects.

There is a school of thought in the franchise industry that ascribes to the belief that a franchisor should provide a prospective franchisee as much information about the franchise opportunity as possible, while complying with franchise disclosure regulations. This includes supplying information that would be of important use by the franchisee when evaluating the franchise. This approach, which I support, takes the position that a franchisor doesn't "sell" a franchise but rather supplies the kind of information that will enable a prospect to make the best and most informed decision they can.

To achieve this level, of what I shall define as Franchise Competency, a franchisor should provide certain information.

Following is the information that should be included for qualified and screened franchise candidates:

The composition of the market that the franchisee will be operating in. This information should include the approximate amount of revenues, number of firms and any large or dominant players in the franchise market.

The nature and quality of the competition and how to meet the competition. Identify any perceived weaknesses of the competitors.

Are there certain critical success factors that relate to the successful firms in the industry? What makes for a successful operation?

Try to use examples of firms that are leaders and what sets them apart from the others.

Credible and recent financial data and statistics pertaining to the industry. U.S. Commerce Department reports are an example.

Key attributes of the franchise such as location and marketing techniques needed to succeed.

What traits and practices do the successful franchises have? The objective is to educate prospects regarding what makes a franchisee successful.

It's important that franchise prospects make an informed and intelligent decision regarding the purchase of a franchise. In order to reach this point in the franchise process it's important to provide the right information. By following this approach franchisors will be providing prospective franchisees information which will enable them to make a better decision regarding the franchise. Franchisors will be utilizing a franchise sales process which is thorough and will be valued by franchise candidates.