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Why You Lost Yet Another Franchisee Prospect to Your Competitor

Guest post by: Mary Tomzack

Article Overview: Franchisors are usually too busy managing their businesses or working with new franchise candidates to recognize why the prospects they almost brought into their franchise system decided to abandon the process or, worse still, join up with a competitor. Chances are they will keep losing candidates and never know why. Franchisors need to take a hard look at their franchise opportunity from a perspective franchisee's point of view to understand where they could be going wrong (and their competitors are going right). And for prospective franchisees, this article will give you a rare insider's view into what the folks on the franchisor (corporate) side are thinking when they are attempting to sell you on investing in their franchise business opportunity.

Why You Lost Yet Another Franchisee Prospect to Your Competitor

Every Franchisor has his heart broken every now and then and, for some, far too often in the 11th hour.

A wise franchisor will speak with ex prospective franchisees and find out why they didn’t move ahead. Unfortunately, franchisors are usually too busy managing their businesses or working with new franchise candidates. It’s a vicious cycle. Chances are they will keep losing candidates and never know why. Franchisors need to take a hard look at their franchise opportunity from a perspective franchisee's point of view.

If you have experienced franchise sales that have fallen apart in the final stages, chances are it had nothing to do with what you did in the final stages. It's more than likely that it has to do with everything that happened prior to that point. Many prospects are non-confrontational; many will keep going with the flow even though they have concerns right from the beginning.

Here are a few things that you MUST have in place or correct:

1. Validation

One of the most important elements in consummating a franchise sale is having strong validation from your franchisees. From our experience speaking with some of the smartest minds in franchise development, we can tell you that no matter how good they are, if they didnt have good references from existing franchisees, it was an uphill battle. As a franchisor, you will never have 100% of your franchisees completely satisfied. However, that doesn’t mean that you can’t have every one of them speaking highly of you and the franchise.

The majority of franchise owners fall into two camps; they are either emotional or logical. Emotional franchisees want a franchisor who sincerely cares and supports them well. Logical franchisees are usually all about the numbers. If you focus on the combined variables mentioned above, you usually can’t lose. When prospective franchisees call your existing franchisees, they will either hear about how caring and supportive you are and/or how profitable their business is. You need to appease both the emotional and logical franchisee to ensure outstanding overall references.

We advise all aspiring franchise unit owners to speak with existing franchisees in the system before investing. Guess what? What your prospective franchisees hear or sense in those conversations could be what gives them cold feet in the 11th hour.

2. Image

Here’s the ugly truth: many franchisors have terrible images. We have had many franchisors contact us requesting franchise development advice. We have to tell them that before they can worry about improving their sales pitches or recruiting systems they should worry about fixing their image.We've seen franchisors with the most unattractive logos, websites and marketing material. If you’re lucky, you might be able to generate leads but a poor image will more than likely make your prospects extra cautious. Their sense for finding flaws in your franchise system will be heightened.

A prospective franchisee needs to be confident in your abilities as a franchisor as well as in the franchise opportunity. It all starts with an attractive image. If you don’t impress them in the beginning, they will eventually pick apart your entire franchise system. Once their confidence in you is gone and they get to the final step, it’s very hard for them to sign that Franchise Agreement. Having a solid image makes most prospective franchisees more confident about your system.

Spend the money on a professional image by revamping or even redesigning your logo, marketing material, website, office or anything else that your prospective franchisees may encounter.

3. Interest and Responsiveness

It’s amazing how many prospects the best franchise development directors speak with who tell them all about the franchisors they were interested in who never called them back or only called them back 1-2 weeks later. The simple reality is that those prospects are much easier to impress than prospects who come directly to a franchise system, because showing even minimal interest in them is a huge improvement over what they experienced from other franchise systems. As a franchise development director, you should always remember that one of your competitors will gladly be responsive and spend the necessary time with the prospects you foolishly ignore.

Most prospective franchisees are looking for a “good business”. Chances are they didn’t grow up dreaming about wearing plastic gloves and placing cold-cuts on 12” bread. Prospects are pretty open minded to many franchise business opportunities. You will not only be competing with franchisors in your specific niche, you will be competing with every franchisor. If it takes your franchise sales people too long to respond to franchise inquiries, prospects will start working with other franchisors. Initially, your franchise opportunity might have been their first choice but at this point it will probably fall to the bottom of their list.

When it comes to decision time, they will review the franchise opportunities in contention. The one edge that other franchisors will have over you is that they showed more interest in the prospect. That might be all it takes for the prospect to go with a competitor. Prospects tend to prefer the franchisors who showed an interest right from the beginning. Building confidence and a good rapport starts with calling all prospects as soon as the lead comes in. Being supportive in the beginning is a sign of how well you will support them once they become franchisees.

Just remember that the moment that you drop the ball with a prospect another Franchisor will pick it up!

Related Articles
  Dealing with Sales Objections: Resistance to Change
  Prescreening Franchisees
  How to Stop Losing Sales
  The Prospect Isn't Talking With Any Other Salespeople
  Dealing with Sales Objections: Competitors
  Selling Value
  Franchisees and The 90 Day Window
  What to Do When You Lose a Bid
  Franchisee/Franchisor Relationship Requires Mutual Trust, Respect
  The franchise sale
  Make the Most of the Franchisee/Franchisor Relationship
  What to Do When Your Prospect Goes into Hiding
  Franchisee checklist - the franchise agreement
  Landing That First Franchisee
  Dealing with Sales Objections: Price
  How to Turn a Request for a Discount to Your Advantage
  FRANCHISE SELLING TIPS: # 4
  Safeguards Inherent In The Franchise Business Model
  The Hidden Importance of Listening
  Funding the franchise business - franchisee

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Related Forum Posts
Protecting IP - Dear BigJim 22 Sure as long as it is in the Franchise agreement... ie wht you are offering as Francisor and what their obligations are as Franchisee It is all in the agreement........ take care Ian
Re: Hiring introverts vs. extroverts - [quote="Evan":37xmbjab]It's generally hard to be a good salesperson if you are an introvert.[/quote:37xmbjab] Evan, I was thinking about the same right? Then I was put in charge of training sales teams and found out interesting traits among the successful ones. Often times, the extroverts talk "too much" and kill a sale. They attempt to overcome every objection by giving answers while NOT understanding they are not hearing true objections. When objections are answered but the buyers aren't proceeding for transaction, they're not telling you the real objection. When that happens, there is a psychological shift occurs that the more you appear needy to sell as a salesperon, the less attractive your sales team becomes because people like to be facilitated instead of being sold. So the hybrid of both characteristics will serve best in sales. The tone of your voice, posture, attitude, all work well... and you want to look confident, mature, calm and not attached to the end result of the transaction. It's like saying.... Mr. Prospect, I certainly would love to welcome you as a customer, but even if you don't proceed, it wouldn't be my loss... but saying this through your tone of voice, look on your face and everything else instead of in words. And some extroverts ones have hard time expressing these messages through unspoken communications, seeking approval for their answers to customers objections by speaking too much. Interesting isn't it? Warmest Regards, Takuya
Re: Franchise Surveys - Good topic, thanks Agree with John [quote="JohnHenning"]Another good tool to researching a franchise is to speak with their existing franchisees. However, part of banding to to have confidence in your franchise brand so I suggest you may not get the answers you are really looking for. Further to this is reading the documents is one aspect as the Rosy pitch is offered by the Franchisor Let me share a recent pro-bono clients experience where reading and talking led to an underlying problem, a lack of business sense and preparation. A wealthy Singaporean Lady whose family members just wanted jobs, good or bad so their views to her were also slanted in their favor. Unless it is a household name, you prepare and understand the concepts, agreement and operations of the franchise. You are taking on too much risk. Locally, let get a couple of numbers. Best Western Hotel, an international brand sells for RM400,000 (plus $135,000) and they must approve the location to protect their brand. She was about to take care of her family members (for how long was the unknown) and put out RM600,00 ($200,000) to buy a new franchise of 4 restaurants (2 located in Malls and 2 in lessor locations, 2 big and 2 small) Now as a former Real Estate Broker in another life, I rank restaurant location right up there with buying properties. An to shorten this, some highlights Highlights Franchisor was selling his personal band name and reputation, not the Real value of the Restaurant brand Selling 4 locations help diversify the risk with the better ones feeding the less successful locations, real return on investment much lower, perhaps 50% of estimated returns Had client do their own demographics for the proposed locations, sit, watch, and count the crowd, test the food, where the masses were going to eat, etc Franchisee had to pick the menu for each location and of course buy the food at no loss to the Franchisor, so 4 locations, 4 menus, 4 different risks and and result NO SALE
Simple way to avoid Cold Calling - Gary, A chiropractor I work with hates cold calling (me too!) and he uses a technique to warm people up to using his services - it's so simple! In Sales your dealing with 3 pools of people: 1. Strangers 2. Prospects 3. Returning Customers You need to move people from one pool to the next. We'll concentrate on #1 and #2 as it's most relevant to your question. My Clients does the following (you just have to tailor it to your situation - be creative). My Client (we'll call him Bob) Bob leverages his time and resources to only get people that need his offer (pain relief) to put their hand up. Dealing with Strangers can get expensive and they don't like to be told what to do as they have no trust or relationship built with him. So to get Strangers to put their hands up he writes up an offer with a free report on a particular pain relief - let's say lower back pain (note: he can simply just change lower back pain to neck pain and have a new report). and uses multiple marketing vehicles to promote the Free report - magazines, newspaper, forums, postcards, private clinics etc. The only people picking up this information are the very people Bob would like as customers as they have Lower back pain. Bob's Free report ends with him stating his services and includes a Free in-house Consultation with no obligation. You'd be surprised at how easily Bob converts Strangers into Prospects. Note: They become prospects when they ask for the Free Guide and in exchange provide their contact details. This gives Bob unlimited opportunity to contact them for the Free in-house consultation with no obligation to continue using him. At this stage Bob's ability to close the sale lies in his office providing good customer service, Bob's ability to help the prospect and provide value at the free in-house consultation. Notice, he hasn't had to pick up the phone to COLD-CALL his Stranger pool or his Prospect pool. Hope that example helps to increase your prospecting!


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