Michael Lorsch—BAI Affiliate—A Profile in Excellence | Be The Boss

Michael Lorsch—BAI Affiliate—A Profile in Excellence


Mar 11, 2013

I recently interviewed Michael Lorsch, a BAI Affiliate who consistently does well and who was willing to share his experience with other Affiliates. The following is a transcript of our talk.

Michael’s Background:
BAI Start Date: May 05
Previous Experience: VP of Finance with large Corporation and with The Great Frame Up for 13 years as a franchisee
Hours worked weekly: 20
Is this your only career? Part-time Consultant for The Great Frame Up
# of deals closed to date: No deals for the first 4 months and 18 deals in the last 19 months
Total Commissions earned to date: $222,000

Lead Generation:
1. Peter Casey Q: Do you use Business Alliance Leads?
Michael Lorsch A: “Yes”

2. Q: Do you network in your business community?
A: “No”

3. Q: Have you ever run newspaper ads?
A: ”NO

4. Q: Have you worked “rebound leads” from franchisors?
A: “No”

5. Q: Do you run your own ads on the web?
A: “No”

6. Q: Do you have your own lead generation site?
A: “No”

7. Q:Do you call every lead the day you receive it?
8. A: “I call the same day or the next depending on the time I receive the lead.”

9. Q: Are there any leads that you won’t call?
A: “No, I call all of them”

10. Q: What percentage of your closings came from “expert advice seekers” vs. “brand specific” leads?
A: About 75% of the deals I’ve closed come from leads who didn’t specify a particular brand.

11. Q: What percentage of people who came to you via “brand specific” leads actually bought the franchise that they expressed an interest in?
A: Only one deal.

12. Q: Do you use an automated email responder like Emax?
A: “No”

13. Q: How many leads per month do you typically purchase?
A: 50 to 60

14. Q: How many area developer deals or multi unit deals have you closed and where did you get these leads?
A: “4 and all were BAI leads

15. Q: Of the larger deals you’ve closed, what was the driver of the client to do something on a larger scale and how did you facilitate/nurture that?
A: “I introduced the idea and educated about the client about the benefits. I then matched the income need with the right franchise—if they needed a bigger income then I showed them larger opportunities.

Franchise education and the Franchises that you show:
1. Q: Do you specialize in certain “types” (Children’s, Food, Auto, etc.) of franchises? If so, what are they?
2. A: “No. I show all types of franchises”

3. Q: Do you focus mainly on certain “brands” (AAMCO, JW Tumbles, etc.)?
A: “No. But there are certain franchises that I like more than others.”

4. Q: Do you get involved with selling established franchised units? i.e. resales?
A: “Generally not. Did sell 1 AAMCO resale.”

5. Q: How many franchises will you show your client and will all be from different industries?
A: “I show 3 from 3 different industries. Sometimes 4.” I believe that this is right from the BAI training book”

6. Q: What criteria do you look for when showing a franchise (cost of entry, number of units, earnings claims, etc?)
A: I put the order of importance as Cost Entry, Skills and Interest, Earnings Claims are a plus. I like franchises with at least 50 franchisees.

7. Q: How do you educate yourself about their particular franchises? Do you attend conference calls, trade shows, discovery days, etc.?
A: “I attend as many conference calls as I can, I review their website and I call the reps. I will try to get a copy of their UFOC.”
8. Q: Do you visit franchised locations to learn more about the franchise (from a franchisees perspective)?
A: I try to when it is practical.

9. Q: Do you attend franchise trade shows?
A: “Occasionally and when they are local.”

10. Q: What tips would you give brokers regarding how to work well with franchisors?
    a. Send them qualified leads with a lot of information.
    b. Have your prospects well educated about their franchise.
    c. “If you are doing what you are supposed to be doing, most franchisors will like you.”
    d. Bring your client to the franchisor website.
    e. Send clients e-brochures to educate.
11. Q: When do you register your client with a franchisor?
A: I only register clients after my client has shown some interest in that franchise.

12. Q: What franchise related books have you read?
A: The Franchise Opportunity Guide, Business Opportunity Handbook—my 13 years in franchising has taught me a lot”

13. Q: What periodicals related to our industry do you subscribe to?
A: Franchise Times.

Q: What is Your Process:
1. Q: Do you have a set procedure for communicating with your clients? (phone, email, letter, etc.) How many “steps” does your process involve (call, email, appt. setting for qualification call, etc.)?
    a. I call them
    b. If I don’t reach them then I send an email
    c. I call the next day at a different time than the previous.
    d. If still no contact—I send them another email.
    e. Third and final call and email after a 10 day holding period. (people might be away or too busy) On my last call and email I let them know that I won’t reaching out to them again and if they want to talk, they can call me.
2. Q: How is this different from the BAI approach?
A: I don’t think it is much different other than the 10 wait period. Pretty much by the book.

3. Q: What is your opening statement to prospects?
A: I say that I am calling them because they responded to a franchise for sale on the internet and that they completed a form online to look for more information.

4. Q: What key points do you want your client to understand within the first 3 (and critical) minutes? Why should they listen to you?
    A: 1. First of all, I tell them that I am a Franchise Consultant
    2. I can help them find the right franchise for their particular situation.
    3. I then let know that the franchisor will pay me for finding them a franchisee.
5. Q: Do you have any tips on how to keep the client off the web?
A: I usually tell them that they can do what I do, but I let them know that it will take them much longer and that they will become frustrated. They seem to already know and want help. I really don’t care if they go back on or not, because I don’t think they’ll hit the bull’s eye on their own.

6. Q: Can you estimate what percentage of your clients who are working with franchises directly as well as other brokers?
A: Maybe 25%. I believe that the people I work with stay with me through my process. They have confidence in me and my process.

7. Q: How do you identify yourself (broker, franchise consultant, etc.)
A: Franchise Consultant

8. Q: Do you mention BAI and your affiliations?
A: I used to. I only mention that when they ask me about the franchises I work with and how I chose them to work with.

9. Q: Are you a salesmen or a consultant? If a salesmen, what do you sell?
A: I say I am consultant. I don’t believe that I sell franchises, but I am selling my expertise and experience.

10. Q: Do you use a Personal Profile Form (A.K.A. CQ, RFC, etc.)
A: Probably not too different. The core of it is the BAI version with some modifications.

11. Q: Who completes the form-you or your client?
A:I email it to them and I don’t ask them to complete it. I just want them to look at it and I complete it when I have them on the phone. I used to ask them to complete it, but they either did a poor job, or that they were reluctant to complete it. I can help them and do a much better job myself.

12. Q: How do you effectively match your clients with a franchise?
    A: I look at:
    a. Financial (capital available)
    b. Skills
    c. Interests
    d. Goals and objectives
13. Q: Do you participate in the initial call with the franchisor and your client?
A: Generally not.

14. Q: Do you ever make validation calls with your client?
A: Generally not, but I have. I do coach them on the process. I send them a list of questions to get them started. I also tell them to expect some negatives and try to determine if they are valid with the franchisor or if the franchisee might not be following the system.

15. Q: Do you provide your client with a list of questions to ask franchisees or franchisors?
A: Yes, they are included in the training manual under Franchising 101

16. Q: Do you define your process to your client? If so, is it in writing?
A: I define when I first talk to them on the phone and via email.

17. Q: What have you tried (in relation to the process) that you now believe was a mistake?
    A: 2 things:
    1. I don’t interview on the person on the first call. I like to email them the questionnaire and set up a different time so that they can prepare.
    2. I spend 3 to 5 minutes presenting each franchise and I create my own version of the 2 minute drill. You have to draw the line between too little and too much information. I used to tell them 3 or 4 bits of information about the franchise and that just isn’t enough. Now I give them my own 2 minute drill.
18. Q: Have you tested certain approaches and found them not to work?
A: Immediate interviews don’t sit well with. Sure they might not be there next Tuesday for our appointment, I’ll give them a second chance but after they’ve proven they aren’t serious. Unless there is a good reason for missing 2 appointments they’re not serious.

19. Q: What is your typical timeframe from:
    a. Receiving a lead to you calling or emailing that lead? A: Same Day
    b. Making initial contact with that lead and qualifying them? A: I usually pre qualify on the first call. I get enough information (financial) to see if I can help them or not. What is their networth, credit rating? If they tell me that they have $5,000 I know I can’t help them and if they tell me their net worth is $3 million, then I know that they are capable and I don’t push further. I try to get the money part done in the first call to save time. I call it pre qualify.
    c. Qualifying them and researching franchises for them to review? A: Usually 3 to 4 work days. If we talk on Monday I’ll present to them on Thursday or Friday. Usually 3 to 4 days.
    d. Presenting the franchise to handing them to the franchisor? A: Many times that is the same day. I go one of two ways. Sometimes they say that they’d like to speak to the franchisor. Sometimes it will take them 4 or 5 days to make a decision on what franchise they want to talk to. By the time my people talk to the franchisor—they really talk to the franchisor. My people rarely fall off the face of the earth. I give them the option of really thinking about it before talking to the franchisor.
    e. Following up with client after the franchisor has contacted them? A: Usually within a couple days. Sometimes I call the franchisor first if I am not really sure how serious the client is.
20. Q: How many referrals to you have to make to get a closing?
A: After I back out my first few months, I close 1 out of every 58 BAI leads that I receive. I have a higher closing rate because I don’t force the process. 1 out of every 5 or 6 referrals I send to a franchisor closes. I give my people a chance, we went through a process and they are really interested. I refer less prospects than most people and probably close a higher a higher percentage of those I refer.

21. Q: How many franchises do you typically show a client?
A: 3 or 4

22. Q: What is your “fall apart” rate? (deal is coasting along and then falls apart at the very end)
A: It is probably less than most. The people I refer really want to talk to the franchisor.

23. Q: Do you have a follow up process (emails, follow up calls) for those who “go cold”?
A: I will follow up with them right away so we can discuss what happened and I offer to go through what I call a Round 2. I closed an AAMCO deal in Dec in a Round 2. We looked at 3 franchises, they didn’t like them==-they did not work and we hit the bull’s eye with AAMCO. That client went on to buy another AAMCO.

24. Q: How involved do you get with the client and franchisor once the referral is made?
A: I typically will have follow up calls once a week. Every now and then I get someone who doesn’t need my help, but most of the time it is once a week.

25. Q: Do the franchise reps, in your opinion, treat you like a partner in getting deals to close?
A: I think it varies. It just depends on the representative from the franchise.

26. Q: What do you do differently now compared to when you first started?
A: I stay involved and if I didn’t, 90% of the deals that I closed probably wouldn’t. I add value in communication with the prospect and the franchisor. When you call the client, you need to have a specific plan—add value to the process. Ask about the UFOC or if they need any help. If they are validating, you can help clarify the issue—you just can’t get on the phone and say “How is it going Joe”. Why would the prospect want to keep talking to you if you aren’t adding value.

27. Q: Do you offer any “free materials” (demographic reports, industry reports, etc.) to increase engagement and to add value?
A: I always send Franchising 101 and an article on Financing Your Franchise.

Q: What does your typical day look like? (New calls per day, presentation calls, education component, etc.)
A: Every day is different. That is what I like about this business.

28. Q: Please give an example of the “easiest” deal you ever done (or the quickest) as well as the “toughest deal” (or longest from start to finish) you’ve ever done.
A: The easiest was a referral to BAI. The toughest was the AAMCO deal that we talked about and obviously was rewarded (twice) and it took about 8 months to close.

29. Q: Do you get involved in any fashion with financing assistance for your clients?
A: Occasionally, but not regularly. I will send people to Guidant.

30. Q: Have you generated any revenue from the franchise industry (since you joined BAI) other than commissions from closed franchise brokerage deals?
A: No

31. Q: If you were starting over today:
• What would you do differently?
A: Not deal with franchisors with a couple of franchisees. Presenting at least a 2 minutes drill’s worth of information is key.

• Q: Where would you get your leads from?
A: I talk to other BAI Affiliates and I ask them about their leads. Sure there are many trashy BAI leads, that is the nature of the beast and no different than anyone else’s leads.

Overall Observations:

Q: What 5 things (or more) “Tips” would you give to a new broker?
1. Be consistent with your process.
2.Be persistent. Don’t be afraid to follow up call and all that stuff.
3.Sell yourself. You’re calling someone on the phone and most people don’t like dealing with people they don’t know. You need to convince them that you genuinely want to help them and that you’re qualified.
4.Stay involved throughout the process and don’t assume that the franchisor will close the deal without you.
5.Don’t take rejection personally. If they don’t want to deal with me, I shrug it off and say so what?
6.Stay organized and use your time wisely.

What 5 things would you avoid doing?
1. Chasing prospecting when there is no hope. Sometimes it just isn’t worth calling some guys 12 times.
2. Chasing Franchisors who won’t respond. They way that they will treat you is the same way that they will treat your clients.
3.Don’t come across as a used car salesman. If someone calls me and they sound like they want to sell me something, I don’t want to talk to them. You’re dealing with people’s livelihood and a sizeable investment and they want a consultant, not a salesman.
4.Avoid making follow up calls with nothing to say or not adding value.

What, in your opinion, are you doing differently or better than most brokers that you’ve been exposed to?
I sell myself way well. Both my background and my integrity. I tell them that they will find me trustworthy and knowledgeable.

I come across as someone who genuinely wants to help them. You can’t come cross as someone who is doing this to get a paycheck—you have to want to help the prospect. If you come across as hungry and selling something they don’t want, they won’t want to work with you. Put yourself in the client’s shoes.

I’d suggest recording your own message or conversation and then listen to it later to see how you sound. My guess is that many would change their overall approach and demeanor if they heard themselves.

    • Q: Do you have a professional website? A: Yes via GoDaddy
    • Q: Do you have a brochure? A: No
    • Q: Do you have business stationary? A: yes
    • Q: Do you offer an 800 number vs. toll number? A: yes
    • Q: What type of email address do you use? Business email vs. personal email?
A: Professional
    • Q: Do you ever mail materials to clients? A:For the people I qualify I mail them a letter, my business card, the broker disclosure document, and franchise statistics.
    • Q: Do you use a standardized Email throughout your process and would you be willing to share it with others? A:Yes, and I will share.