FRANCHISE PROSPECT SELECTION, ART OR SCIENCE?

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

After backtracking a bit and smoothing things over,  I made the point that we are the only industry that I know of where the sales person can end up in court for making an “earnings claim” by answering the simplest and most basic of investor question, ”how much do you think I can make?”  It’s almost un-American what we are not allowed to say to potential franchisees.  The FDD is the document that contains all the things you can say without getting into trouble. That’s what makes it the mother of all sales tools.

I think the shoe should be on the other foot.  There should be a PDD, Prospect Disclosure Document, wherein the prospect must lay bare all his or her strengths and weaknesses, and deepest motivations for wanting to be in your business. They should be required to show all the things that will not otherwise show up in the application.

In a way you have some control over that.  Let me explain.

The normal process for interviewing potential franchisees is to:

  • identify prospects
  • disclose them with an FDD
  • have them fill out an application
  • 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 same sequence but they usually follow the same pattern. Can you spot what’s missing?  Let me give you a hint; where does the prospect identify their specific internal strengths, and are they consistent with what it takes to successfully execute the franchisor’s concept?

Companies can be hired that create and execute business oriented personality profiles based on a questionnaire designed for the purpose of identifying the traits most important to the business. They do that by extensively interviewing existing individual franchisees. Those franchisees are then separated   into groups of highly successful, and below average, franchisees, based on business results. The averages then form the basis of successful profiles and not so successful profiles.

I am most familiar with the work of a company called KENEXA (recently sold to The Forum Corporation in Boston) but there are others that do the same kind of work, and, frankly, it adds another layer of predictability about the individual and how well they match the best performers.

Not every franchisee prospect is crazy about taking one of these. But, if explained properly, it can serve both parties; after all, no one wants to be in a business that they might not like or be good at. 

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

Find a franchise business that suits your needs today!

 

Upcoming Expos

Jan 24-26, 2019 Ft. Lauderdale, FL
Card image cap

Franchise Expo South

Broward County Convention Center
May 30-Jun 1, 2019 New York, NY
Card image cap

International Franchise Expo

The Javits Center
Sep 13-14, 2019 Rosemont, IL
Card image cap

Franchise Expo Midwest

Donald E. Stephens Convention Center