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Why Your Franchise Sales Process is a Disaster
What a breakthrough franchise sales process looks like
By Joe Mathews
For more than 10 years, I had the distinct fortune to live and work in the rural and pristine Berkshire foothills of Litchfield, Connecticut. “The Northwest Corner,” as the locals call it, explodes into life in the spring. That weather gives way to warm, comfortable and shady summers, and then fall bursts forth with vibrant and colorful glory. (Winters are not so pleasant, which is why I hightailed it to Nashville, but that’s another story.)
To take advantage of the gorgeous three seasons, and to overcompensate for the sucky winters, I decided to purchase a large sunroom to use as a seasonal home office. I researched some manufacturers and invited a large national contractor out for a bid. When the bespectacled, nerdy, 30-something salesperson rapped meekly on my door, it set our two poodles into a barking frenzy. (We herded the dogs into another room so they didn’t cover the poor man in poodley cuteness and doggy saliva.) In one sweeping motion, I let the man in and introduced myself. He had the appearance and personality that virtually ensured that everyone he met would forget his name at “Hello.” Including me. Since he looked and carried himself like an “Alvin,” henceforth I will call him “Alvin.”
I invited Alvin into our dining room. We chatted briefly about what I was looking for in a sunroom and why. Or, rather, I did. He just nodded robotically as he half-listened to my reasons for wanting to buy a sunroom. Moments later he reached down and pulled out a 100-page salesman’s flip chart. He started feverishly flipping pages while he explained the science, logic and benefits behind tempered glass, foam insulation, snow-proof roofs and aluminum frame construction. He paused only briefly now and then to take a deep breath, as though he were about to swim three lengths of a pool underwater. After about five minutes of this relentless sunroom verbal carpet bombing, I had had enough. I reached over, gently closed his flip chart and pulled it away from him with the stealth of a seasoned ninja. Stunned into silence by my lethal combination of take-charge attitude and mad ninja skills, his jaw dropped.
I took advantage of his shocked silence.
“Alvin, let me enlighten you as to the certain train wreck that will occur if we continue down the track we are on. In five minutes or less I will stop listening. But you won’t know that, because I will maintain the illusion of paying attention — just like I did for the old nuns in Catechism class. In 10 more minutes I will lose my patience, and you and your little flip chart will be outside my house wondering what the heck just happened. You look like a nice guy. And I really want a sunroom. So let me tell you what we are going to do differently. I am going to ask you questions. You are going to give me honest answers. If I don’t ask you something, just assume I don’t care.”
Then Alvin said something. Something that indicated how trapped he was in his underperforming franchise mentality: “But that’s not my sales process.”
To the myopic “Alvins” of the franchise sales world, I ask, “Why should buyers care about your franchise’s sales process?”
Right now legions of adamant, yet underperforming, franchise salespeople are answering as though with one voice, “If they can’t follow our sales process, then they won’t follow our operating processes and procedures also.”
Let me also ask you the following: “Was Alvin’s sales process consistent with your buying process? Or, more importantly, mine? Is it unreasonable for me to refuse to listen to a 90-minute, 100-page opus about the history and evolution of the three-season sunroom? Would my staunch unwillingness to suffer such excruciating boredom as Siberian political prisoners or Ice Capades audiences say anything about my credentials as a buyer?
Here’s another way of looking at it. When your sales process is inconsistent with a franchise candidate’s investigation and buying process, he or she won’t buy. It says absolutely nothing about them, but it says everything about the franchisor’s skills in recruiting top-quality franchise candidates and understanding of how franchise candidates make investment decisions.
The way candidates buy franchises has changed significantly, and a lot of franchisors have been caught off guard, exposing flaws in their recruitment processes, skills and systems. For instance, sometimes franchise sales people, especially less skilled ones, will tell us, “I don’t even want to talk to somebody unless they’re qualified, they send in a financial statement, and I run a credit report.” They have set up hurdles they want a candidate to jump over before they’re even ready to have a conversation.
Maybe that’s the way it’s always been done, but It’s inconsistent with how people buy franchises today. A franchise sale, when it’s done right, is a simple, friendly, give and take of information: You give a little, you get a little.
A franchise buyer has a series of questions and concerns as they try to wrap their mind around your opportunity. Every candidate has a “franchise buying process,” and that buying process is highly consistent across brands, industries and investment levels. If your franchise sales process isn’t consistent with how candidates buy, deals don’t happen.
And to the unskilled franchisor, it will look like the franchise candidate derailed the process, when the responsibility really is squarely on the franchisor’s shoulders.
What do the Loch Ness Monster, Easter Bunny and Franchise Sales Have in Common?
I have two brothers who are educators, and there’s a saying in education, “We haven’t taught until they’ve learned.” They would even go on to say, “There’s almost no such thing as teaching, there’s only facilitated learning.” If you carry that logic into franchise sales, there is no such thing as franchise sales. There’s only facilitated franchise buying.
I ask the franchise salespeople reading this article to think about the last franchisee they recruited. At the end of the process, what was your relationship with the new franchisee? Did it feel like a “buy-sell,” transactional relationship? Or was it something different?
Start with the Right Relationship
When we ask those questions most franchise sales people say, “You know, the relationship is actually more of a friendship. I was a trusted adviser, I was a facilitator, I was a friend, I was a confidant.” Then when you ask them, “When’s the last time you actually remember feeling like a salesperson?” What they say is, “When people aren’t buying.” They only feel like salespeople when they’re employing typical hard-sell techniques that salespeople pull out when the process is breaking down.
Start with the Right Philosophy
Franchise buyers don’t want to be sold. They want to be helped, they want to be supported, they want to be consulted with. They want to own a business, but they don’t want to be sold the business.
Bottom Line (or in the words of my 16-year old son, Casey, ‘Good thinking, Captain Obvious’)
If a successful franchise buyer-franchise salesperson relationship has no trace of the typical transactional relationship. If franchise buyers don’t want to be sold. And if the only time franchise salespeople experience selling is when the process is failing, WHY ON GOD’S GREEN EARTH WOULD YOU KNOWINGLY AND WILLINGLY INTRODUCE SALES INTO THE PROCESS?
Designing a Facilitated Buying Process, or Giving the Buyer What the Buyer Wants When They Want it
Our research found that people go through several distinct phases before they buy a business. Smart franchisors know these phases and have organized their franchise sales process accordingly, creating a facilitated investigation and buying process instead.
Phase One: Self-directed Research
The first phase is self directed, and you don’t get any direct access to the buyer during this part. They spend an immense amount of time, on your website and on other sites, comparing your opportunity to other opportunities and making some high-level decisions about what their options are. They’re limiting their options even before they speak to a franchise salesperson.
To reach those buyers during their self-directed phase, smart franchisors use content to make a concise, compelling case about to why their business is unique, profitable, necessary, defensible against competition and positioned to thrive over the long haul. Smart franchisors earn conversations with online content. Ineffective franchisors think, “If they want the story, they have to talk to me.” Then they wonder why no one answers the phone to hear their story. They blame it on the leads: “It must be the leads. We need more and better leads.”
Phase Two: Qualification
A franchise buyer wants to know they are qualified before they invest a lot of time into the buying process. They want to know several things right up front: Are they financially qualified? Are they in the area you’re offering franchises? Are there territories available there? Do they have the transferable skills, background and education to be a successful franchisee in your system? Knowing all this early on benefits the franchisor, too, because the franchise salesperson doesn’t waste significant time starting a process the franchise candidate can’t finish.
Phase Three: Interview and Overview/Getting to Know You
In this phase, the franchise salesperson and franchise buyer will get together by telephone for one hour or less, and the franchise salesperson asks questions designed to get to know the franchise buyer as a person. Zig Ziglar has a saying, “People don’t buy drills they buy holes.” Or, they don’t want the tools, they want the results. We believe that logic carries into franchising. Franchise buyers do not want a franchise. Not really. What they want is for their life, career or investment portfolio to improve — according to their definition of improvement. They want a solution.
The franchise salesperson can’t possibly know what the franchise buyer is looking to achieve without this phone interview. The salesperson should ask questions about who they are, what their transferable skills are, what their background is, what they like and what they don’t. Find out what things energize them and what things shut them down. By the end of the call, the franchise salesperson should have identified the franchise buyer’s particular brand of genius and how that can translate to success in the franchise model.
One of the key mistakes salespeople make is to skip right from the prequalification call to the webinar. They proceed to “dump” all the features and benefits of their business on the potential buyer in a one-size-fits-all approach, before they know anything about the buyer’s reasons for change, what they are looking for in a business, or how the buyer defines worthiness or success. Highly skilled franchise salespeople interview first, and then show how the franchise buyer may be able to achieve the results they want, using the business model as a vehicle.
Phase Four: The Winning Formula
In the phase, franchisors want to educate the franchise buyer on the levers they need to be pulling on a day-to-day basis to make the business model work. Franchisors should demonstrate the tools and processes that drive revenue, retain customers, upsell customers, hire and retain good employees, and ensure that the business is going to be profitable far into the future.
In addition to showing the tools and discussing the nuances of the model, the franchisor should discuss the franchisee-franchisor relationship, explaining how they work together to add value to the customer’s experience and to each other’s business.
Franchise buyers don’t want the franchisor to sugarcoat what the business is or what it takes to win. They want it right between the eyes.
Highly skilled franchise salespeople understand that and will shoot straight, cementing their role as “trusted facilitator of the investigation process.”
Unskilled franchise salespeople do what sunroom Alvin tried to do. They want to hear themselves make a pitch, no matter what the wants and needs of the buyer who’s on the receiving end.
Phase Five: FDD Review
A franchise attorney once told me that their franchise salespeople use the FDD as a sales tool, but I don’t think the FDD adds any emotional engagement to the buyer’s process. In 30 years I have never had a franchise buyer say: “I was on the fence, but then I got your FDD. Now I’m ready to move forward.” In this phase the franchise salesperson needs to take the “one-sided sting” out of the FDD and to ferret out and resolve potential deal-killers. At the end of this phase, if the franchise buyer says to himself, “I don’t like it, but I can live with it,” the franchise salesperson did their job. To get there, the franchise salesperson should walk through the 23 items in the FDD and discuss what they mean. The franchise salesperson should highlight what the franchisee’s responsibilities are under the agreement, and get agreement that the franchise buyer will carry out their duties. This phase can generally be completed in one conversation, but it may require a follow-up call.
Skilled franchise salespeople can bring potential deal-killers to light and engage franchise buyers in problem-solving. They may even highlight areas that have given franchise buyers fits in the past, and then skillfully bring the buyer around to the mindset of the franchisor, showing why the clause must read a particular way to protect the investments of the successful and compliant franchisees.
Unskilled franchise salespeople email the document to candidates and hope they don’t read it. Or worse, share it with an attorney.
Phase Six: Validation
From FDD Review we go into validation, which is conducted during multiple conversations over multiple weeks. During the validation phase, the franchise buyer is building up their financial model, talking to franchisees and hearing from the horse’s mouth the answers to questions like, “What does it take to win? What can I expect from the franchisor?”
Skilled franchise salespeople know their franchisees and facilitate conversations for the candidate with franchisees with similar backgrounds, demographic territories, competitive situations or who are producing results that are in line with the prospective franchise buyer’s definition of winning.
Because the candidates are setting up their financing strategies, skilled franchise salespeople also network with highly responsive financing sources who understand the franchisor’s business.
Unskilled franchise salespeople tell the candidate, “Call the SBA and tell me what they say.”
Phase Seven: Discovery Day
As validation is winding down, many franchisors will invite buyers to attend a Discovery Day, where they meet the corporate leadership and hear where the chain is going. Buyers get a chance to listen to individual department heads talk about how they support and shepherd the franchisee’s businesses, and they get a behind-the-curtain peek at tools and processes the leaders develop to help franchisees win.
Phase Eight: Decision Time
Once the buyer comes back from Discovery Days, it’s decision time. We look for a yes or no answer in one to seven days.
Then all that is left for the buyer to do is to sign the franchise agreement. The buyer’s financing should be in place. The franchise salesperson leads a simple hand-off meeting between franchise sales and operations, and the onboarding process begins.
And that’s what a good, solid, buyer-friendly process looks like.
Did you see any unnecessary hurdles? Did you hear anything that was inconsistent with how buyers buy?
Deal Pacing and Managing Emotional Engagement
Franchise sales is a marathon, not a sprint. Highly successful franchise salespeople understand the art of deal pacing and know how to leave the franchise buyer in the right mental state for each phase of the franchise buying process.
Franchise sales masters pace the buyer along the following model:
In Phase One, the franchisor uses a specific content strategy through articles, blogs and their franchise opportunity research to manage the franchise buyer’s understanding of the franchise business model and its long-term sustainability in the marketplace. Each piece of content is designed to increase emotional engagement and break down any barriers to conversation.
Phase Two is a five-minute prequalification call and sets up the one hour “Getting to Know You” interview and overview.
In Phase Three, before the buyer and franchise salesperson discuss the business, the salesperson builds trust and rapport by asking questions that allow the salesperson to understand the buyer as a person. Then they show the buyer how their objectives may be met using the business as a vehicle. The skilled salesperson is satisfied leaving the franchise buyer “cautiously optimistic” about the business (40% emotional engagement). If they hear the buyer is “red hot and ready to go,” (80-90% emotional engagement) the skilled salesperson knows that emotional level will not sustain over a 60-120 day period. They will throw some water on the fire to bring the buyer back to the “cautiously optimistic” 40%.
In Phase Four, the Winning Formula, the skilled franchise salesperson is educating the buyer in how the model works. They show how the business is unique, profitable, necessary and sustainable for the long haul, and what franchisees need to do on a daily basis to win. While they make an excellent case for the business model, they don’t assume the model is right for the candidate. They come from the powerful place of “I know the model is great for the right person,” but they do not pretend to know that this buyer is the right person. They raise the buyer’s emotional engagement level to 60%.
Unskilled franchise salespeople go for the jugular. Like Alvin selling sunrooms. They approach the meeting armed to the teeth with slick presentations and pre-planned responses to common objections. They push to elevate the buyer into “red hot and ready to go” status, oblivious to the fact that this level of engagement is not sustainable through the buying process. They end the meeting set up for a major buyer “cool down” period, rather than leaving the buyer ready to steadily increase emotional engagement.
In Phase Five, the skilled franchise salesperson walks the buyer through the FDD. They don’t try to hype them or gloss over potential deal-killers. They confront those issues head-on. They even point out areas that have given past buyers fits and then explain why certain sections of the FDD read the way they do. They leave the buyer thinking, “I may not like all the terms, but I can live with it.”
Unskilled salespeople take an “if they don’t ask, I won’t tell” position on the FDD, and just hope the buyer doesn’t read it.
In Phase Six, skilled salespeople quarterback an information-gathering and validation process designed to reach a logical conclusion, resulting in a “yes” or “no” decision. They check in regularly, asking such questions as, “On a scale of 1 to 10, how ready are you to make a decision?” If the buyer answers “8,” they respond with, “Great. Let’s identify what’s missing and work together to put those pieces in place.”
Unskilled salespeople try to hype the buyer, hide negatives and discredit any disgruntled franchisees with such comments as, “They would be more successful if they followed the system.” They ignore the fact that “the system” sold them a franchise and is at least partly responsible for the franchisee’s results. They also sell Discovery Day hard. Their process doesn’t follow a well-designed series of phases: The front end is designed to get people to a Discovery Day, and then Discovery Day is designed to close the deal.
In our process, Discovery Day is all the way at Phase Seven. There, skilled franchisors enter the meeting with this philosophy: “This may be the only time the buyer will meet one-on-one with each decision maker. Let’s honor their investment by giving them the time to ask anything. Nothing is off the table.”
Unskilled franchisors design Discovery Day as a series of pitches with no give and take.
Skilled franchisors know that after Discovery Day, buyers will be at an emotional engagement fever pitch, from which engagement levels can only go down. Time becomes the enemy. They inform candidates early on that Discovery Day is the end of the validation process. After that, the franchisor and franchise buyer each take a day and decide whether they will be doing business together. If they both decide “yes,” then they sign an agreement and the onboarding process begins.
Unskilled franchise salespeople are so gung-ho to get buyers to Discovery Day that often the buyers still have to apply for financing, still want to validate with more franchisees, or still plan to bring the FDD to an attorney. Emotional engagement wanes. Deals drag on. The longer they take, the harder they are to close.
That is why skilled salespeople outperform unskilled salespeople by 200%-300%.
Unskilled salespeople alter the buyer experience in negative or unproductive ways, rendering the process ineffective.
A well-thought-out process will help narrow, but not close the gap between underperforming salespeople and highly skilled salespeople. And those highly skilled folks? A well-thought-out process will take them to whole new levels of results.
Curious how your current franchise sales process holds up? Start a conversation with us and see if you can learn how to adapt faster to the changes in today’s market.