Validation is something you should be thinking about even if you are just now considering how to franchise a business. You might think that you are responsible for selling your franchise, or that you employ the people responsible for selling your franchise, but that is simply not true. The people that impact your franchisee recruitment the most are not your salespeople, they are your existing franchisees. They are your salespeople. If they are happy, you will sell franchises, and if they aren’t, you won’t.
Sure, there will always be one or two people out there who you can “talk into” buying a franchise, because the concept you have happens to be what they have dreamed about their whole life, but most people make their investment decision based largely on what they hear from the franchise network.
Validation is even more important to a start-up franchise than it is to a mature franchise. When you have 100-200 locations or more open, and 2-3 franchisees that are unhappy, the impact is not nearly as damaging as if you only had 5-10 franchises open with 2-3 that were not happy with the system. Furthermore, a start-up typically will not have any name recognition to lend it credibility; the only credibility is what comes from the franchise network.
Of course, most franchisors know that validation is important; they just don’t know what to do about it or even if they have great or poor validation. There are a few key steps a franchisor can take, however, to measure validation, find out what is helping and hindering it, and quickly improve their system-wide validation with minimal investment.
Please note that there is one killer for validation that we cannot help; an unprofitable model. If your franchise model does not allow for franchisees to make money, then stop selling and fix it.
Step One- Measuring Validation
Before you can address franchisee validation issues, you need to learn what they are and how rampant they may be throughout your system. You may think that this is as simple as talking to your support personnel and finding out what the key franchise complaints are, but unfortunately it’s just not that easy. You see, when some franchisees is talking to their franchisor, they often feel at a disadvantage and that they have to exaggerate problems to get help. Other franchisees may not want their franchisor to know they are struggling, or may not want to admit they need help, so they may sugar-coat things. Conversely, when some franchisees are talking to prospects, they may feel their ego is on the line and talk about how great they do, they may feel loyalty to the franchisor so put the best shine on things, or they may be concerned that the prospect might compete against them, so they might try to talk the prospect out of buying. Basically, often what your franchisees tell you and what they tell prospects is two different things.
So what’s the solution? How do you find out what franchisees are telling prospects? It’s simple; become a prospect! Call your franchisees as though you are considering buying your own franchise. Ask specific questions. Questions like
- What was your total initial investment?
- Have your sales and profits met your expectations?
- Knowing what you know now, would you make the investment again?
Asking these and other, similar questions will give you a true insight not only into how your franchisees validate, but also any upcoming problems in your system. Make sure you also ask questions to find out what makes the happy franchisees happy. Try to get in touch with every franchisee in the system. Don’t use cell numbers or other personal information, though. Only use information available to your prospects, like information from the FDD and your website. Click here to learn how Franchise Beacon can provide this service for you.
There is a saying in franchising: There are two types of franchisees; franchisees that succeed because of their own efforts, and don’t succeed because of corporate. In other words, typically franchisees take credit for their successes and lay blame for their failures. Most likely, after you finish these calls, you will have a laundry-list of good and bad observations from your network. Now, you need to triage them. If franchisee says that the franchisor sends too many emails, or a certain person in corporate isn’t responsive, that is not quite as important as if they say no one ever answers the phone at corporate, or the technology system is horrible, etc. Once you have a succinct list of complaints, go though them and look for the complaints that:
- Are repeated consistently
- Could potentially stop someone from investing
- Are solvable
Narrowing the list down to (hopefully) 2-3 issues that fall within this scope, and put together a plan of action to solve them.
Step Three- Communicate
Rather than wait until you solve the issue before you improve validation, communicate right away to franchisees that you know the issue exists, and your plan to solve it. Give them a detailed plan, with target dates and milestones. Simply knowing that you are aware of the issues and working towards a resolution can turn validation around.
Step Four- Solve
Take the plan of action that you put designed in step two, and execute on it. Read more about how Franchise Beacon can help you with this step
Step Five- Keep Communicating
People get used to being upset about the same things. Sometimes, they get so used to this that they don’t notice when the problem is fixed. Make sure that you are communicating your progress to your network, and let them know when you feel problems are solved. Invite their feedback.
Step Six- Target The Upset Franchisees
Reach out to the franchisees that were the most vocal or the most upset about a specific issue, and talk to them about the solution you implemented. Ask for their thoughts and feedback. Find out if they feel the solution is adequate. Invite them to be involved in finding solutions in the future.
Step Seven- Repeat
Every 12 to 18 months, repeat this process. This will help you keep validation under control, and also keep your finger on the pulse of your network in a way that that no other process can.