Franchise Sales is unique. So is the franchise purchasing decision.
I was recently discussing franchise sales with my contact at a franchise lead provider we recommend, and the subject came up of just how unique our industry is.
I can promise you there is nothing else like what we do. If you are new to franchise sales, or even if you are a seasoned professional, you may have never realized, or lost sight of, the truly unique nature of a franchise sales transaction.
Let’s start out with the obvious; franchise sales can be frustrating. There are so many things outside of the development professional’s control that can blow up a perfectly good placement; a bad first validation call, an ill-timed yelp review for one of your franchisees, or a franchise coach steering a candidate that you know is a good fit toward another brand, just to name a few. Franchising in general, and franchise sales specifically, also takes patience. In my franchise career, which is approaching 15 years, I have had one franchise sale that took over 900 days to progress from first contact to agreement signing, and close to a dozen that have taken over a year. I can tell you, without a doubt, I have the patience for franchise sales, franchisee management, and franchise consulting in general only because I understand the uniqueness of my chosen field. In this article, I am only going to address one part of that uniqueness: the prospective franchise candidate’s decision-making process.
You Are the Last in A Line of Decisions
In order to maintain patience, and more importantly empathy, during the franchise mutual evaluation process, all you need to do is step out of your bubble and put yourself in the prospective candidate’s shoes. Investing in your franchise brand is not a stand-alone decision; it is the last of 5 decisions, all of which are pretty heavy. Let’s look at them individually. A prospective franchisee must decide:
- To be in business for themselves. This seems self-evident, but if either you haven’t made this decision yourself, or it was a long time ago, take a moment to remind yourself how intense of a decision that is. As a business owner, if things go wrong, it’s your fault. If you lose your investment, your business, harm your family’s financial situation, as the owner the buck truly stops here. In my opinion, this takes a while for most people to fully internalize, and many never acknowledge it consciously. I believe at least some seemly-solid franchise sales fall apart in the 11th hour because the fear of failure with no scape goat is something the prospect just can’t get past.
- To walk away from their careers. Separate from number 1 above, if your brand is owner-operated, remember there are businesses that offer a fairly passive role for the owner, allowing them to stay employed. Being an active franchisee often means giving up benefits, retirement plans, and the assurance, no matter how flawed, that they have a “job” and therefore their income is steady.
- They want to be in your industry. Your industry is likely either mature, meaning that it has a proven record but also probably has many big players, or emerging, with few if any institutional competitors but also without a long track record of proven success. If you happen to be in between the two, the odds are your industry going through a period of consolidations, commoditization, and other growing pains. No industry is immune to this. QSR, service-based industries, tech industries, the senior care industry, and all others have some unique combination of benefits and drawbacks.
- They want to be a franchisee. The franchisor/franchisee relationship is at times strained. Franchisees don’t have full control or autonomy over their own business. You will find certain prospects wouldn’t consider “going it alone”, while others will be more resistant to the idea as they work through your process, but in every successful franchise sale the prospect at some point decides to accept the good and the bad of franchising.
- This is you. Step five. In order to make an investment decision with your brand, a prospective candidate has to have worked through the previous four. With some very few exceptions, however, prospects are still working through those when they contact you. This is why persistence in the franchise sales process is key.
So, the next time a franchise prospect goes cold on you for a week or two, or a month or two, and then resurfaces, reflect back on these five steps, and have empathy. The next time you lose a “perfect”, well-matched prospective franchisee, realize that, even if they were the right fit for you the reverse might not have been true. It won’t make the loss of a franchise sale, or the patiently waiting weeks for returned calls, to be any less frustrating, but with empathy comes understanding, understanding builds your knowledge, and a stronger knowledge base will make you better at this thing we do.