What Makes a Great Franchise Sales Process

Sale - the exchange of a commodity for money; the action of selling something.

The definition remains constant whether the interaction is over a burger, a home or even a franchise. The process of a sale can be as simple as agreeing on a specific price. A sale can get much more complicated if the sale involves a large sum of money and serves as an investment for both parties - the case in franchise sales. The prospective franchisee is required to have enough equity to purchase the rights to a brand while fitting the qualifications of brand culture. Opposite, the franchisor must be a reputable source providing as much information possible to the franchisee making sure the transaction is smart investment of both time and money. Franchise sales can be a daunting and tedious process to go through. With many intricate steps and requirements, the sale can take up to a year.

With such a long course, a brand’s franchise sales process must be well thought-out, understandable and defined. “Brands must have a process,” says Sean Fitzgerald, No Limit Agency*’s Chief Development Strategist. Fitzgerald worked in franchise development for brands such as Wireless Zone, Brightstar and Quiznos. Fitzgerald, in an interview with 1851 Franchise, explains that brands can have either steps or a process. Steps are not as detailed as a process, which “for every call there is an action.” Fitzgerald also explained that a process is much more defined compared to steps helping both the prospective franchisee and franchisor. With definition, the franchisee candidate has an easier understanding of what both parties need to provide in order to reach a sale. “The last thing you want is a stall in your process, if well defined, will help the sales team and the applicant reach their end goal,” says Fitzgerald.

On top of that, an organized process is easily evaluated. If the franchise development team sees more losses than wins, they have the ability to step back and critique their process. “You can reevaluate - see what works and what doesn’t, what resonates and what doesn’t,” says Fitzgerald. After evaluation, a sales team strategically place people at the phases and stages they fit best in utilizing your sales team’s full potential.

Along with a defined and laid out process, it is important for both parties to develop a relationship. “The franchisee and franchisor, in a transparent way, must identify whether or not the franchisee is a great cultural and economic match,” says Paul Pickett, the Chief Development Officer of Wild Birds Unlimited*. This relationship will allow for the two groups to connect and also understand where each player stands. Pickett says the candidate must “know that the franchisor owns the brand and that the franchisee needs to understand that they represent the brand.” Pickett explained that the “first call” sets the tone and the foundation of the upcoming relationship. “It is a paramount part of our franchise sales process.”

Another way a sound relationship develops between the brand and the prospective franchisee does not come with interactions between the two parties, but from research. Researching can save enormous amounts of time for both parties. “We certainly do our diligence on a candidate and want them to do their diligence on us. We really want them to understand our brand culture and the service model in our restaurants so getting that right is probably the most important,” explained Jeff Sturgis, Vice President of Franchise Development at McAlister’s Deli. With prior and continual research, irrelevant and shortsighted questions will be answered, therefore meetings and conversations become much more productive and meaningful.

Lastly, having a precise Franchise Disclosure Document or FDD can make or break the sales process. The law requires a company to present this document to the candidate two weeks prior to any sort of contract signing. Pickett explains the FDD as “the definition of the franchisee franchisor relationship.” He believes the “FDD gives understanding to what a franchisee is willing to do when they join a brand’s system.” This document provides all of the financial performance representation, legalities, and more. The franchisor also must go over it with the franchisee in intense detail to ruin any sort of surprise in the future when franchising.

Franchise sales is a unique beast of its own. It is an agreement of not only money, but of uphold brand culture. Both parties come to the table providing what the opposite wants; franchisee is looking to buy into a brand, and the brand is looking for a franchisee. The two groups work together towards an end goal of a sale. Getting to that end goal is a timely and difficult task, but focusing and refining specific parts of the process will create productivity and understanding making it easier to reach.