Closing the Franchise Sale: Defining the Relationship

A franchise sale takes some times months, even years to close the sale.  This process and timeline takes some getting used to for more sales professionals who have not been in the franchise industry before and are just starting their franchise marketing campaigns.  Franchise sales are a unique sale and in most cases are unique from any other recruiting process.  In the end, a sale is a sale and the franchise sale still needs a solid close in order to get the check and finalize the relationship together. 

What’s different about closing a franchise sale from closing any other transaction?  First, the franchise sale is really the culmination of a marriage between the franchisor and the franchisee.  So even though there may be heated, even confrontational discussions leading up to the closing, it really is the beginning of what typically is a 10-20 year relationship.  As the franchisor, this means that you need to be conscientious of how the sale is managed and make sure that nothing is handled too “hard-nosed” and that the relationship has legs once the transaction is final.  Second, it is important to remember that a franchisee is considering so many variables which could weigh on their decision as to whether to move forward with the franchise that it is impossible to even comprehend what might be holding them back from signing on the dotted line.  These could include family decisions, personal interests, fears, lifestyle concerns or other intangible elements.  You should always take this into account in that they may not be saying “yes” for reasons outside of your control and possibly even unknowing to the buyer themselves.  Third, the franchisee is typically starting a business for the first time, so we not only are selling them on the value of the franchise being offered, but also on the merit of starting a new business.  This creates an extreme paradigm shift for the buyer and requires patience, consultative sales ability and a personal connection to the buyer to convince them to make the move into entrepreneurship.

How is the franchise sale set up and positioned?  It depends on the franchise system and where the concept is in it’s maturity as a brand.  Larger franchise systems can have a much more strict sales process which works to disqualify the buyer at every step throughout the sales model.  Newer franchise systems work hard to pull the buyer through the franchise sales process and sell the value of the model in order to maximize interest and close a sale on a limited number of leads.  In either case, the close is set up at the Discovery Day where a relationship with the buyer starts and the actual “deal” begins to happen.  It is my experience selling with Franchise Marketing Systems that the actual sale starts at the first personal meeting.  This is where the buyer begins to really consider the move and actually figure out how they would make the transaction come together.  When they sit down with you as a franchisor and they like what they hear, enjoy your company and begin to build up the positive emotion around the franchise investment, it all of a sudden becomes real.  Now is when the franchise buyer considers how they will leave their job, get the cash together, convince their family members and make the move into the new business.  They start to envision themselves as part of the franchise organization and associate with the brand.  The sale truly comes down to a single day, even single moments during that day where a significant impression is left with the buyer and they make the decision as to whether they belong with you. 

What can you do to improve your chances of closing sales at franchise discovery days?  First, pay attention to the details.  Great franchisors I’ve worked with focus on the minutia of the day, leaving a gift for the franchisee at their hotel, picking them up at the airport, taking them to lunch and spending time to get to know them goes a long way.  Second, allocate the resources to the day in order to show them the best possible impression you can offer.  Clean up the office, clean your car and make sure your shirt doesn’t have stains on it from breakfast, they might seem petty, but these little things go a long way in presenting your value as a mentor and leader of the franchise brand.  Third, don’t skim over details and fast talk through concerns the buyer has.  It’s easy to forget that the business you know so well isn’t as simple for others to comprehend as it is for you, talk slowly, clearly and with clear intent to help them understand.  Overall, make sure that the discovery day is as much of a great experience for the franchise investor as it is a content-driven day, you want people to leave the day feeling excited, positive and wanting to spend more time with you, odds are they will move forward with the franchise investment if they like you.

For more information on how to franchise your business, email us:  [email protected]

Christopher Conner

President

Franchise Marketing Systems