The Ins and Outs of Outsourcing Franchise Sales and Using Referral Networks

Most established franchise brands have a dedicated sales team, but when young franchise concepts are first beginning to bring in candidates, having a dedicated staff person for selling franchises can be an expensive investment. To help alleviate that stress, young brands may work with outsourced franchise sales. The industry veteran tends to be established and understands how to find and handle leads. The major reason that a brand would decide to use someone like this would be so that they would only have to pay that person when they close a deal.

“Generally, outsourced sales is for new franchisors, and there are many benefits for using them. They’re ready to go, know the sales process, and they know laws and regulations,” said Eric Little, Chief Development Officer of Right at Home*. “Some salespeople just want to sell and prefer to act more as an independent contractor which working as outside sales lets them do what they like and it allows them to talk to people on the phone.”

Little himself is an industry veteran with 20 years of experience in franchise development. In the past, he’s worked with outsourced sales and said they definitely offer benefits to the start-up franchisor.

“I think outsourced franchise sales has a great place in the industry for the start-ups. If you can get an outsourced sales team out there that works on a commission basis and understand franchising, understands how to sell, and understands how to educate; these people are willing to do it without being attached to a brand,” Little said. “The benefit for the franchisor is that they get access to good franchise talent without having to bring them on as employees at a fixed cost. It allows them to manage cash flow, but it gives them access they probably wouldn’t have been able to afford. Outsourcing your sales allows a young franchisor to recruit a good franchise development person.”

And he mentions that outsourced sales teams are similar to working with franchise brokers. Although not the exact same, franchise brokers can bring the internal franchise development team a qualified lead that will strongly perform within a franchise system.

FranNet, a referral network, is used as a supplemental lead source for franchise brands in which consultants work with local franchise candidates and deliver qualified and interested leads to franchisors to close the deal.

“Most of the people we see would never see the franchise brands that we suggest to them on their own. We are seeing people early on in the process who aren’t sure if they want to be in franchising, and we provide education on franchising,” said Jania Bailey, CEO of FranNet. “Most people think of franchising, and they think of fast food and that it costs $1 Million dollars to purchase and that they can’t afford it. We’re providing information to people that wouldn’t be on their radar.”

Little has used referral networks since around 2000, and he continues to see value in working with referral sources like FranNet.

“I think there are a lot of benefits, but it’s important to train these franchise brokers on who it is you’re looking for,” said Little. “If you get a lead from a broker network and you did a good job training them on what you’re looking for, nearly every lead coming in is qualified. I believe that when a broker lead comes in, it should be worth your time. It’s evolved over time.”

Whether you are working with an outsourced sales lead or broker network, these are two options to bring more leads to franchise brands.