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Franchisors Should be Careful When "Selling" a Franchise

Guest post by: Ed Teixeira

Article Overview: Franchisors should avoid the aggressive "selling" of a franchise; they should direct their efforts into providing prospective franchisees the information needed to make an educated and well informed decision. Learn why this is important.

Franchisors Should be Careful When "Selling" a Franchise

Franchisors should avoid the aggressive "selling" of a franchise; they should direct their efforts into providing prospective franchisees the information needed to make an educated and well informed decision. Learn why this is important. When a person looks to invest in a franchise opportunity they obviously seek to "buy" a franchise. However, it doesn't necessarily follow that those representing the franchisor should be "selling" the franchise. Although this may seem confusing, let me explain some of the reasons why.

The Person Representing the Franchisor Should Act as a Consultant

• An aggressive franchise sales approach can lead to unqualified people purchasing a franchise. By unqualified I don't refer to just financial or business qualifications but rather people unqualified to operate a particular franchise.

• Franchising is the beginning of a relationship. An individual that invests in a franchise does so with a look to the future.

• One of the most effective ways to qualify a franchise candidate is to carefully guide them to their decision by providing them valid information and clearly stating answers to their questions.

• Use a franchisee profile and stick to it. If the candidate does not have the attributes contained in the profile they should not be granted a franchise.

The Person Investing in the Franchise must be as Objective as Possible

• Be disciplined in maintaining your objectivity regarding a franchise. I advise candidates to be cautiously enthusiastic.

• Follow a set process when you consider a franchise. You can find a number of articles on our website. Also you can visit the FTC site.

• Always remember that the majority of franchises depend upon adding franchisees for growth. This can place added pressure on those who sell franchises to make a sale.

• Have advisors with the business experience and qualifications who can provide you credible advice.

• Gather as much information and feedback as possible from current and former franchisees.

• Focus on the quality of the investment you are about to make.

Franchisors need to focus on making sure that prospective franchisees are properly guided toward making a decision based upon the long term interests of both the franchisor and franchisee. A strong sales approach by franchisor representatives may achieve short term results but can mean problems down the road.

Franchise candidates must avoid being "sold" but rather concentrate on the quality of the franchise investment.

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Article Tags: consider a franchise, franchise, invest, prospective franchisees



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Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
how much for a franchise fee? - Dear Colleague There is no easy answer to this question. Things to consider: [list=] The sizeof the Franchise Clent base Expected Turnover Intellectual Property costs (recoup) Number of Franchises Number of employees Original Set up costs Franchise admin costs An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000. Hope that this gives you some idea Take care Ian[/list]
Re: Quote of the Day - ?"Money motivates neither the best people - Hi, To jump on the bandwagon "Careful what you wish for, sometimes you get it"
Re: Franchise Surveys - Another good tool to researching a franchise is to speak with their existing franchisees. This contact information is included in most Franchise Disclosure Documents. In order to get a Franchise Disclosure Document or FDD as it is often referred to, you will have to complete a basic franchise application. The franchisor will then usually provide you with the FDD at that time. Included in that book of information is a list of the existing franchisees, the contract, the investment information etc... This information is required by Federal Law to be disclosed to your prior to making a purchase. So be sure to do your research and start with the Franchise Documents to get the initial information.


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