Franchisors typically don’t evaluate validation the same way they evaluate franchise sales budgets – but they should.
There are several silver bullets to franchise sales – but each must be fired together to accelerate your growth.
A great brand is vital, obviously, as is your development website (read more about franchise development websites here). Above both of those, and ultimately the most important piece of a candidate’s decision-making process, is validation.
Recently, as I find myself doing often, I was talking with 1851’s Chief Development Strategist Sean Fitzgerald about validation and its importance. We agreed that unfortunately, franchisors typically don’t evaluate validation the same way they evaluate franchise sales budgets – but they should. Here’s our take on the five biggest mistakes franchisors make with validation, and consequently, franchise sales:
- Franchisors think their system’s validation is much better than it actually is. In franchise due diligence, candidates will rarely rat out your franchisees as bad validators. Rather, they will fall out of the sales process quietly or without a great reason. If candidates are dropping out around the time of validation, there may be another reason – your franchisees. Make sure you are doing regular temperature checks with your current system to better understand their challenges and concerns so that you can proactively address them in the sales process. Being proactive allows you to prepare an alternative view to that of what your franchisees may present.
- Some current franchisees wait until validation to complain. They feel that the candidates are the only ones who will listen to them and gladly take their shoulder so they can pour out their problems. Don’t assume franchisees are not complaining. A small complaint of a franchisee can still be a big complaint to a candidate.
- A tepid franchisee response is not good validation, either. If someone asks for advice when buying a car and turns to a friend who drives it and asks if they like it and that friend’s response is, “Well, it gets me where I want to go,” the lack of enthusiasm won’t motivate that person to buy. If the friend says, “The car is so awesome,” then, that person will be more motivated to buy. A lack of excitement from your franchisees can harm your system. Keep them excited.
- Franchisors don’t see validation as a temperature check on the likelihood of current franchisees expanding within their system, but they should. If your franchisees aren’t growing, they are not helping to sell candidates. Together, this can create a stall.
- When performing due diligence, candidates won’t just talk with your best franchisees. They will also look to contact the closest franchise to the location they want to purchase. If you are trying to grow an area with bad franchisees, good luck. Bad validation in a market area makes it 10 times harder to sell in that area. Make sure you work on franchisee happiness within your key growth markets.
Validation is not something you can fix or Band-Aid overnight. This is why your entire organization’s approach to franchisees is so vital to franchise development and growth. When trying to figure out your growth plan for next year, make sure you are putting effort toward validation so that it turns into a growth asset, not a deterrent.