Franchising

How do all of these franchise organizations manage their franchise sales process? It is remarkable how many franchise systems out there, in the United States a new franchise is opened every 8 minutes of each business day, that is an amazing rate of growth! So franchising works, I get it. How do you find franchisees once you have gone through this process of franchising a business though?

When evaluating franchise sales, it is critical to first identify who the franchise buyer is and who we are working to sell the franchises to. Franchise sales encompass a large array of different types of franchise offerings. The traditional franchise is the owner operator model where typically a moderately well capitalized individual buys into the rights to run and manage a single location of the franchise offering. This franchise sales approach is most effective when using a sales presentation that evokes an emotional response. For example, "Be in charge of your own financial future, become the captain of your OWN ship!" Presenting the franchise to the buyer is not about the financial details, the minutia of the business offering or other particulars, it becomes an emotional decision for the buyer to get into business on their own with your help. Franchise sales is about creating that emotional connection with the buyer, similar to the process of selling a home, the buyer falls in love with the idea and the notion that they will be in that house, neighborhood, they picture their family being raised in that home and envision the future they will have there. The individual franchise buyer is typically not a former executive or highly educated individual with millions to invest, it typically is just someone who wants to get into business for themselves and they know they need someone's help doing it.

The franchise sales process is typically a 30-120 day process with a potential candidate, some take much longer. The evaluation process takes place on both sides, the buyer judging whether the franchisor has the support, training and overall package to truly support them and the franchise sales person gauging whether the franchise buyer has the capital, experience and wherewithal to be a franchisee.

The second type of franchise sales is to sell to a multi-unit franchise owner. This franchise offering is someone who has much more capital and experience. In this franchise sale, the buyer purchases the franchise rights to a much larger territory with a larger responsibility. They then are put on a performance schedule by the franchisor who establishes how many units the multi unit franchisee will be opening. This franchise sale is a different sale than the individual franchise. This buyer is highly sophisticated and has most likely been in franchise development before. They look over the financials and make an investment decision based on the ROI and how quickly they will see a return on the investment. In order to make this franchise sale the franchise system probably needs to be somewhat mature and have a really professional package to offer the franchisee, they are typically being courted by many franchise systems. The offering needs to make sense, in many cases the only realistic way to attract this buyer is to present earnings claims and business plans, these people are making an investment when they buy into the franchise, not buying into a lifestyle.

When approaching the process of franchise sales, it is critical to have people, consultants and a system in place. The first step is planning out the stages and carefully preparing for how to manage the influx of leads and responsibilities that come with franchise sales. The beauty and excitement of franchising is that with each franchise sale a company is expanded into a new market, the franchisor gains the valuable work ethic and commitment of a vested owner operator and the franchisee gets the training and support needed for them to become their own business owner.