Buffalo Wings & Rings and iStudio Salons say there is an art to the high-level investment deal.
Chicken wings and salon suite rental. Two very different franchise concepts, but for the development folks leading the growth charge at Buffalo Wings & Rings and iStudio Salons, there is a commonality: Both are selling a franchise opportunity that comes at a higher-than-average investment level. All-in investment costs to open a Buffalo Wings & Rings restaurant run between $970,000 and $1.5 million, while investment to become an iStudio Salon franchisee is $531,250 to $1.15 million.
Maneuvering the engagement and process with franchise prospects at that level of investment requires some finesse, and the approach differs from selling a low-cost or standard-level investment opportunity.
1851 caught up with the men behind the expansion of the higher-ticket brands, Buffalo Wings & Rings Chief Development Officer Philip Schram and iStudio Salons VP of Franchising Jim Deering, for insight and advice for those selling a franchise opportunity with a higher investment. Schram, who made a career first in the French and then U.S. automobile industries before becoming part owner of Buffalo Wings & Rings in 2005, has helped guide the rebirth of the brand which turned 30 in 2014 and is coming off a record year where the team signed 17 new deals. Deering is a franchise industry veteran who has worked multiple deals over $1 million during his career, including multi-unit deals at Wingstop, and is now guiding iStudio Salons as it launches its franchise program after building nine successful locations across Florida and Indiana.
The two chimed in on four main areas to be mindful of when selling a high-investment level.
Time is of the Essence
Both Schram and Deering stress the importance of timely response to franchise prospects. “Folks with the wherewithal to make large investments have less patience for waiting around for someone to get back to them,” said Deering. Additionally, Schram says that high level investment prospects don’t like to waste time. “These are savvy financial analysts, so the discussion quickly goes to the return and how quickly they can make their investment back,” said Schram. “So, we talk money right away. People who have a long experience in fast food are typically not a good fit for Buffalo Wings & Rings since casual dining is such a different beast. So, we typically discuss that issues like that right off the bat to be respectful of everyone’s time.”
Honesty is the Best Policy
“Transparency is key so that nobody is wasting time,” said Schram. He stresses that because the time between signing and opening can take longer with an investment and build out like Buffalo Wings & Rings, it’s extremely important to be honest with each other. Similarly, Deering says that honesty should be couched in a straightforward approach. “The honest part is simple, but some folks struggle with the straightforward part,” said Deering. “Sophisticated buyers see right through spin and evasive answers. If they ask you about something and the answer is less than flattering for your brand, so be it. You will get rewarded through continued interest if you are forthright with your candidates.”
A Marriage Based on Business
In his experience selling million dollar deals, Deering has learned that the most successful deals come from knowing that both sides are a good fit for each other. It goes both ways. But both contend that laying the foundation for that trust lies in a mutual desire to make money and live the brand’s mission and values. “It’s about culture, they need to like us and we need to like them. At the end, despite how big they are – it’s still people doing business with people,” said Schram. “Typically, because they have already been involved in businesses, the process is easier because we go straight to the point. We can usually tell quickly if our brand is a good fit for their business needs.”
Communicate throughout the Process
“If you skip some of your process or otherwise modify your process due to their level of sophistication, be sure to explain to them what you are doing,” said Deering when speaking to the need for both sides to maintain an open and constant line of communication with each other. “If you treat them like cattle, they'll be grazing in someone else's pasture.” Schram agrees. “Some investors want to see the end results right away, but it takes time to find the right real estate and do the build out the right way so that it will all lead to maximum returns,” he noted. “We discuss the patience they need to have in order to find that right location and build it out the right way, so we are constantly involved and supporting them through this. We reinforce the fact that if they follow the prove process, they will see the return but that it takes an investment of time as well as money.”