The CAFA round-table led by Warren Lewis franchise attorney at Akerman Senterfitt, with panelists David Gould a 20 year franchise sales veteran, Nikki Sicilian, Director of Development at Buffalo Wing Factory and Pub an emerging franchise and an audience packed with franchise professionals discussed franchise sales.
Nikki Sicilian explained Buffalo Wing Factory's sales strategy. As an emerging franchise brand, they have focused their search on recruiting new franchisees in their core market of Washington, DC targeting established franchise brand and independent operators.
David Gould shared his wide experience with capital intensive, large footprint, child care franchising, and also lower cost print and business services franchise.
David emphasized importance of having a great franchise sales funnel, or sales process, to ensure franchise recruitment success.
The Audience's Response - When to Provide an FDD
Warren, David and Nikki's program elicited great audience participation.
One very lively discussion ensued about when to give the FDD to a prospective franchisee.
There was mixed opinion amongst the franchise professionals assembled ranging from giving the FDD at the outset or at discovery day.
1. Franchise attorneys in the room agreed that no matter where a franchise seller thought it best for their franchise sales funnel to responsibly deliver the FDD in the event a bona fide qualified prospect requested an FDD the franchisor must provide it upon that reasonable request.
2. But Franchise sellers expressed the concern that "time kills deals" and if you give the franchise-buyer the FDD too soon they can get bogged down with their attorney and other influencers. (This was not a popular sentiment amongst the franchise attorneys who only make money by making deals happen!)
3. However, David pointed out that having a well-designed franchise sales funnel solves the sales problem in a compliant manner.
With a correct sequencing, the FDD could be delivered well before the discovery day. The Franchisor would meet 14 day waiting period that must occur before a franchise deal can close by early delivery of the FDD.
Time does indeed kill deals, so don't put yourself in the position of having closed a deal and then have to wait an extra two weeks. "Don't turn a yes into a maybe." said David.
There was consensus that unnecessary added time can hurt your franchise deal closing "batting average".
A Recap - What Your Sales Funnel Must Include
And while time may kill deals, rushing to a quick franchise transaction close is a problem as well.
When it comes to prospective franchise-buyers, whether they be first-timers or savvy multi-brand multi-unit franchisees, they have a lot of questions.
These questions center around 3 primary things buyers want to know about your franchise offering .
1. Is my area available?
2. How much does it cost?
3. How much can I make?
And since franchising is a complex ongoing relationship sale successful franchisors take great care in designing their franchise sales funnel.
The best franchise sales funnels have a decision-tree that includes these 7 major steps.
1. Inquiry pre-qualification
2. Application qualification
3. Concept - Discussion
4. Relationship - Discussion
5. Development - Discussion
6. Discovery Day Meeting
7. Franchise Agreement Execution
Professional franchise sellers design their franchise sales funnel or process to move franchise candidates through these steps by listening to the 3 concerns expressed by all franchise candidates.