The Truth About Franchise Development Series: Your Top Franchise Sales Guy is Your Franchisee

Your top franchise sales guy is your franchisee. And your franchise sales team won’t be able to do his or her job without a strong website. And your franchise sales team won’t be able to hit their goals without the right strategy and execution.

84 percent of your deals--historically--will come from referrals. Who are your best referrals? Your customers and your franchisees. Yet, very few brands put enough funds toward this category of lead target--instead focusing on the harder-to-find needle in the 16 percent of everything else.

Everything else would be portals, trade shows and blind Google PPC. The 84 percent is PR, marketing, wine-and-dines and relationship building.

So, if statistically your franchisee will be the strongest salesperson on your team, how are you using it?

Here are two stories:

The first story starts with me talking to a client.

“What do you do to encourage your franchisees to drive lead awareness?” I ask.

“We give them a $5,000 franchise referral,” they say.

“If I wouldn’t recommend your brand for a $5,000 referral fee, why would they?” I say.

$5,000 is great, but it’s not a game changer. It’s $100,000 in gross income’s royalty. It won’t even give that person a vacation. What’s that deal worth--especially if it came from a referral source? Let’s say the brand does $500,000/year gross sales and will be a single unit franchisee for the next five years. Then, in royalty alone, it’s worth $125,000 to you. Let’s add in a $25,000 franchise fee. Now you are at $150,000. What is the most you would be willing to write on a check for me if I agreed to give you a check in return for $150,000? Would you give me $100,000 to make $150,000? Would you give me $145,000 to make $150,000?

Let’s say, conservatively, you are willing to give me $50,000. Then, that’s the equivalent of two year’s royalty. Would I recommend a brand for two years of royalty relief? Damn right I would.

How do you position the referral? How do you motivate your current franchisees to help you find growth? Are you thinking too one dimensional?

Here’s the second story.  

I was talking with a client who said their franchisee validation was crap. Yes, they of course wanted to blame us for their lead issue--but after explaining how validation kills the sales cycle, they instead decided to use us as their best consultant in repairing their issues.

I started with a franchisee meeting. I went into the meeting knowing that the true opportunity was in education of franchisees.

I asked the client who one of the toughest to validate franchisees was; identified him; walked up to him and started talking.

“How’s it going?” I asked.

“Not great,” he said. “The brand has these meetings where they proclaim that they will ask our opinion on the marketing. They then tell us their vision and don’t ask for our opinion and roll it out. Then it sucks and they want to know why we don’t support them.”

“Does it suck?” I ask.

“It does. And I had opinions that may have helped make it better,” he says.

Problem one, franchisor is saying they want the opinion of the franchisee but never asks for it and instead demands the execution.

“So, what’s the solution?” I ask.

“Look, if they want to just tell us this is what we are doing, fine. But when they ask for our opinion and don’t listen, that’s on them,” he says.

Contentious.

“So, would you recommend the brand?” I ask.

“No. No I wouldn’t. I don’t know why I am so invested in it,” he says.

This franchisee owns four locations.

“You know, if you don’t validate, you will lose more money,” I say.

“What? How?” he says.

“If you don’t help grow the franchise; stay neutral or positive in the validation calls, then your four locations won’t get maximum support around them. Look at the units that have multiple locations around them. What are their AUVs? Are they making money? Sure, there are communication issues, but more stores in a single market has meant higher volume. More money doesn’t fix your issues with the brand immediately, but it buys more time, right?”

“Sure,” he says.

“If you would help validate, be positive, then perhaps that would help open up the conversation, help grow the brand, help you make more money, help marketing execute more. It’s a waterfall,” I say.

“I see what you are saying,” he says, and pauses. Then calls over another franchisee to talk about the value of positive validation.

If franchisees are your best sales team, then work with them, listen to them, coach them on the power of validation.

The reason we go on review sites to leave bad reviews is because we want to be heard. We want someone to hear our point of view when they don’t do it right. Franchisees are the same. They talk with prospects negatively because no one else is listening and creating solutions. Thus, their last word is with the last people you want them to have the last word with.

Think about this:

Maybe your sales process should have two buckets--the 16 percent and the 84 percent. Within the 84 percent, maybe you should focus on strengthening relationship. While sales teams usually put the relationship with operations, they are the ones who convinced the franchisee that this franchise could fulfill their dreams. Maybe sales should be more hands on in the complete lifecycle and relationship of franchisees. If that relationship is money, then the franchisee will also invest their money back into the franchise--buying more units, making more money, and helping you achieve your sales goals.

This column is a part of a four-part series on franchise development. View Part 1 and Part 2.