The Five Keys to Closing

The toughest challenge for most franchisors trying to grow their companies is the need to recruit more new franchisees and to make sure that they have the right kind attributes to be effective.  The secret to success in addressing this issue is to have a system in place to maximize results.

The investigation of a franchise opportunity is a communication process.  The goal is to exchange enough information between the franchisor and the prospect so that they can each make an informed decision about whether a match exists that will be beneficial to both. 

Make no mistake, there is selling involved.  The hardest part of the process is not in deciding whether you should “award” a franchise, it is in getting the prospect to decide to apply for one.  If that doesn’t happen, there is nothing to award.  After the prospect has decided that they want a franchise, then it is the responsibility of the franchisor to determine if they want the prospect as a new franchisee.

An effective system for recruiting new franchisees starts with an understanding of a few important characteristics that most prospects share.  These include:

Prospects are Unorganized.  The franchisor needs to establish a system that clearly defines a process of investigation that the prospect can and will follow.  This system should define and cover all the critical areas of the business so that the prospect, at the end of the investigation, has a clear understanding of what their life will be like as a franchisee.  This type of system has the added benefit of allowing the franchisor to see whether the prospect is willing and able to follow a system – a key success indicator for most franchises.

Buying Decisions are Emotional.  It is essential for any system to determine and address the motivation of the prospect.  Why do they want a franchise?  Why now?  What do they think will change in their lives if they become a franchisee?  Systems that directly address these points recruit a lot more new franchisees.

Prospects Always Communicate Interest Through Actions.  Always, always, always!  Watch what the prospect does, not what they say.  A truly interested prospect will move right through an investigation and make a decision.  A prospect that fails to review documents or call franchisees or anything else on a timely basis is telling the franchisor, plain and simple, that they are not really interested.

The five key components to a successful system for recruiting new franchisees directly address the characteristics of a typical prospect.  They are also designed to screen out people who are not system oriented so that a franchisor will not end up with rogue franchisees who want to reinvent the wheel.  Using a system with these components will produce more and better results for franchisors.

I. Provide the Methodology

Remember that prospects are unorganized.  They need structure and leadership in the investigation process.  A successful system communicates the critical components of the franchise that a prospect needs to understand in order to evaluate the franchise opportunity.  These components, often including training, marketing, legal, real estate, and the recruiting of employees, should be communicated both verbally and in written supplements provided to the prospect.

The system should define, upfront, the beginning, middle and end of the investigation process so that the prospect knows where they are at all times.  The prospect should also understand the parameters of a reasonable timeframe for the entire investigation process.  This timeframe should not exceed two to six weeks from start to finish.

II. Decision Day

A key component of a successful system is to ask the prospect, at the beginning of the process, to set a goal for the date by which all the information will be gathered so that a decision can be made.  This goal is called Decision Day and is referenced throughout the communication process to reinforce the commitment made by the prospect. 

It is important to point out that neither party can pre-judge what the decision might be.  Neither side has enough information yet to know this answer.  All that can be done is to set the date by which the decision will be made.  No other single strategy will result in more recruitments being completed in a timely manner. 

III. Pace and Timing

It is essential that a franchisor peak the interest level of the prospect at the same point in time that they want the decision to be made.  This sounds so simple as to be trite, but most franchisors make this mistake regularly. 

It is quite common for franchisors to receive an inquiry from a very interested prospect and to immediately set up an extensive personal meeting.  In many cases, this meeting will last for hours and cover virtually all of the topics the franchisor or prospect may be interested in.  This meeting also often involves the delivery of the FDD to the prospect.  It is quite common to hear comments like “it’s all done but the shouting” at the end of such meetings.

The challenge is that the franchisor has succeeded in peaking the interest level of the prospect way too early in the process.  The franchisor must then attempt to keep the prospect at this peak interest level for at least two weeks until they can legally apply for a franchise.  This is almost impossible to do and when the interest level of the prospect changes, it can only go down from this peak state.  Once this interest level starts falling, as it almost always does, it’s very difficult to stop the fall before the prospect crashes and burns.

Any successful system for recruiting new franchisees must be designed to consistently build the interest level of the prospect throughout the investigation.  The system should cause this interest level to peak when the time comes for the prospect to make their final decision.

IV. Screening and Funneling

The function of screens in a franchise development system is to test the interest level of the prospect regularly to see whether additional effort with the prospect is warranted.  Remember that we said a prospect always indicates their true interest in the franchise through their actions.  We need to monitor this interest level.

A screen is any action that you expect or require the prospect to complete in order to move to the next step in the process of investigation.  The most basic and common screen that almost all franchisors use is the completion of a questionnaire by the prospect.  Usually this screen will eliminate at least 90% of all solicitation generated leads.  Screens further in the process can be things like reviewing the FDD, calling existing franchisees, visiting units, meeting with the franchisor, etc.  Anytime a prospect fails to complete a screening task on a timely basis, it is a red flag concerning their interest level in the franchise.

The process of funneling is one of the most effective tools that you can use to drive the investigation process to a decision on a timely basis.  Funneling consists of asking the prospect, typically starting just past the middle of the investigation, to identify the remaining issues or questions that need to be addressed before they have enough information to reach a decision.  The goal is to reduce any and all outstanding issues until none are left.

Funneling is not a judgemental process.  Its goal is simply to identify a short list of remaining topics that still need to be dealt with so that the “decks are cleared” and the prospect has everything they need to decide.  It is obvious that the franchisor will proceed with this list and take care of the items as rapidly as possible but make sure to re-ask the question in each conversation once the funneling process begins.  Sometimes a new issue will come up that needs to be added to the list.

V. Creating Urgency

It is essential that you create some sense of urgency in the prospect to actually make a decision or most of them never will.  There are a number of techniques you can use to assist in this area.

The most important is to communicate your interest through your actions.  Just like you monitor the interest level of the prospect, they will be monitoring yours.  If you want prospects to feel urgency and to take you seriously, you need to act this way toward them.  Jump on leads when they come in.  Call when you say you will. 

Use delivery services to create a sense of urgency rather than just mailing things.  Reinforce the Decision Day commitment you’ve gotten from the prospect.  Always look for upcoming events that the prospect will want to participate in.  Point out that a timely decision will allow for such participation. 

As a final thought, keep in mind that there is always an “all or nothing point” with every prospect.  This is when you determine that spending more time with them is not as good an investment for you as moving on to a new prospect.  Most franchisors wait far too long to reach this point.

Franchise prospects who cannot make a decision on the franchise in a timely manner, when they have all the information they need, make lousy franchisees.  Save yourself some grief learning this lesson the hard way.  After the prospect has completed your process of investigation and answering all outstanding questions, they owe you a decision.  Not a buying decision, but just a decision one way or the other.  Remember: No decision is a decision.