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A prospective franchisee wants to know the process for franchise approval and that means you better have one. It needs to be clear, concise and achievable.
When you're developing the process, think of what you can support. Check what your competitors are doing. Most companies that offer franchises also detail the steps to acquiring a franchise on their website. The information is there, all you have to do is go look.
Start with basic steps and customize them for your situation. Here is a sample process:
Area demographics are critical to franchising. Not only will you depend on demographics for your market analysis, you'll rely on them when you determine the scope of the territory you're going to grant a franchisee.
There are a lot of companies that specialize in extrapolating U.S. Census information and for a fee you can get just about any report you need. Reports that are cross-tab or have nested requirements are very expensive and not too many companies can supply them. Be sure you know what you really need in a report before you request it.
Another option is to do your own research. Depending on how recent it is, you may be able to use the census data without extrapolating. Census data is available online at no charge.
There is also a great deal of information on state websites. You can usually find maps, population and industry data. Other sources include free demographic websites such as ePodunk.com. This site provides in-depth information about “more than 46,000 communities around the country, from Manhattan to Los Angeles, Pottstown to Podunk.”
The prospective franchisee's personal and financial qualifications aren't the only things you need to consider. You also have an obligation to thoroughly understand the market in which the franchisee is proposing to operate. It does no good - and a great deal of harm – if you've got the ideal candidate and business in the wrong place.
You must analyze the proposed market area yourself. Don't assume the franchisee knows how to do this. Some questions to ask about the area are:
You have a personable, qualified prospect that also has a lot of cash on hand. What else do you need to know before you take the next step and offer a franchise?
You absolutely without question need to do a background check on your prospective franchisee. You should include a consent form for background and credit checks in your franchise application. Once you receive the signed consent form proceed with the checks. Whether it ultimately effects your decision or not, you need to have a thorough understanding of your prospect's background. A background check includes criminal, sex offender, bankruptcy and credit checks.
You can run background checks through a variety of online processors. LexisNexis is a respected vendor, and their website contains all the information you need to apply for an account with them. Note that they will require proof of your business license, professional license and corporate charter or similar certificate of organization.
E-mail is a wonderful medium for distributing a lot of information in a very short amount of time, but it's also a medium that is rife with potential security issues.
When you send franchise information via e-mail to prospective leads, make sure you use .pdf files. These are files in a format that can be read but not changed. If you do not have the necessary software to save .pdf files on your computer you can convert files online at www.adobe.com. There is a fee for conversion, but it is reasonable and it protects you from unauthorized changes.
Another benefit of the .pdf format is that the files are smaller than most application files and thus easier to send and receive. You do not want to irritate a potential franchisee by sending huge files that they may not be able to download.
When a prospective lead contacts you for more information than you provided in your initial response, you need to give them what they ask for. Make a complete package of information and offer it either electronically or by mail. Try to offer the majority electronically – printing and postage add up! You should familiarize yourself with the kind of information your competition provides, and provide at least that much. Basic information includes:
You need to determine what your initial response to people requesting franchise information is going to be. You may have a dozen or more requests every day. Are you going to call and talk to each of these people personally? Can you afford to do that in terms of time and money? Can you devote not only the conversation time but also the time to actually get hold of someone and not their answering machine? Can you be at your best and truly sell your franchise multiple times a day? Do the people making the requests want to talk to you?
Probably not. It's much more economical and efficient to generate an e-mail response. Draft a letter that's friendly and professional to thank the requestor for their interest. Continue with some background information on yourself and your business. Note that you have a great deal of information available to qualified people and that you'd be glad to discuss their interest further. Ask them to contact you via e-mail or telephone if they'd like more information.
That doesn't sound like it's enough of a contact, but it is. It's a sales pitch and it doesn't give away your confidential information for no purpose. Ninety percent of the leads you get aren't going to be valid. They'll be people fishing or wishing, not qualified prospects. Of the 10% remaining, 7-8% won't meet your requirements. It's the remaining 2-3% you want to spend your time and effort on selling.
Give enough information in the initial contact to spark their interest. Then get serious with more if they want it.
You have hundreds of potential leads. A few of those are qualified candidates. Should you sell to the first person that can come up with the franchise fee? As tempting as it may be, you really don't want to sell a franchise to just anyone who has enough money. This is going to be an ongoing relationship and you have a vested interest in seeing your franchisees succeed. So do your part and screen for success.
You should determine the profile of your ideal franchisee up-front, particularly documenting the skills and talents required. The characteristics of the franchise business dictate the kind of franchisee needed.
You're going to work with this person. Make it the right one.
When you request contact information from a prospective lead you should request a level of information that is useful to you. Name, address and phone number aren't sufficient. You have limited time to respond to these people and you want to make the most efficient use of it and that means prioritizing who you contact first – and possibly at all. Absolute basic contact information includes:
· Best time to call
· Desired franchise location
· Timeframe for franchising
You may also want to request:
· Qualifications for franchising
· Planned sole owner or partnership?
· Financial information
Not everyone is comfortable imparting this degree of information, but many people are, and the more information you receive the better you can plan.