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FRANCHISE PROSPECT SELECTION, ART OR SCIENCE?

In a board meeting a few years ago, Ialmost made a CEM (Career Ending Move).One of our board members made the comment that the Federal DisclosureDocument (FDD) should not be used as a sales tool.  I reacted too quickly and blurted out, “Areyou kidding, it’s the mother of all sales tools”.

After backtracking a bit and smoothingthings over,  I made the point that weare the only industry that I know of where the sales person can end up in courtfor making an “earnings claim” by answering the simplest and most basic ofinvestor question, ”how much do you think I can make?”  It’s almost un-American what we are notallowed to say to potential franchisees.The FDD is the document that contains all the things you can say withoutgetting into trouble. That’s what makes it the mother of all sales tools.

I think the shoe should be on the otherfoot.  There should be a PDD, ProspectDisclosure Document, wherein the prospect must lay bare all his or herstrengths and weaknesses, and deepest motivations for wanting to be in yourbusiness. They should be required to show all the things that will nototherwise show up in the application.

In a way you have some control overthat.  Let me explain.

The normal process for interviewingpotential franchisees is to:

  • identify prospects
  • disclose them with an FDD
  • have them fill out anapplication
  • set up a face-to-face interview
  • bring them to your office for a“discovery day”
  • close the deal

There are different variations of the samesequence but they usually follow the same pattern. Can you spot what’smissing?  Let me give you a hint; where doesthe prospect identify their specific internal strengths, and are theyconsistent with what it takes to successfully execute the franchisor’s concept?

Companies can be hired that create andexecute business oriented personality profiles based on a questionnairedesigned for the purpose of identifying the traits most important to thebusiness. They do that by extensively interviewing existing individualfranchisees. Those franchisees are then separated   intogroups of highly successful, and below average, franchisees, based on businessresults. The averages then form the basis of successful profiles and not sosuccessful profiles.

I am most familiar with the work of acompany called KENEXA (recently sold to The Forum Corporation in Boston) butthere are others that do the same kind of work, and, frankly, it adds anotherlayer of predictability about the individual and how well they match the bestperformers.

Not every franchisee prospect is crazyabout taking one of these. But, if explained properly, it can serve bothparties; after all, no one wants to be in a business that they might not likeor be good at. 

Don’t get me wrong, the most importantthing is your sense for the prospect and if you believe they will fit into theculture (that’s the art part).  But ifthe profile is designed properly it will support the conclusion or send upwarning signals if it doesn’t (that’s the science).

Find a franchise business that suits your needs today!

 

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