Recently in Development Category

What I want to know this: If talking to qualified leads is so important, then why are your franchise sale people failing at the basics of qualifying?

Few, if any franchisors that we mystery shop for, get the basics right. And, so as a consequence, their sales team doesn't talk to enough qualified leads & you have wasted the brand's marketing dollars.

Instead of executing the basics, franchise sales teams, confused by a false understanding of "speed to lead", use their CRM to try to set telephone appointments, uselessly offering up their calendar as an incentive.

Your automated & automatic email says to your prospect that a machine is in charge. And the machine is a carnival barker yelling "Buy My Franchise." Who's is gonna buy their franchise from such a process?

Do this instead and try it for a couple of months. You will get better results. We guarantee it.

  1. Ditch the inquiry auto-reply email. It is a wasted message that does not advance your prospect's interest in your franchise.
  2. Set up your website form to give an immediate inquiry success confirmation while they are on your website. You could even point them to your franchise testimonial page to read how other people have succeeded with your brand.
  3. Then, use their email address to find out more about them and their social media presence. You need to learn more about how to do this with LinkedIn. This qualifying process could take a couple of days.

But, forget sending emails that demand people fill out your franchise application, just so that they can talk to you.

Would you send your important & confidential financial information to someone you have not spoken with and developed at least a basic level of trust? I thought not.

It is too hard to fill out a form while using a smartphone to access the form.

Finally, develop a short early stage lead phone/text message designed to provoke their curiosity, some thing like:

"Hi, it's Joe. I have the franchise information you wanted. Call/text me back."

Don't overthink this process.

Get good at phone qualifying people when you talk with them. No need for them to fill out a lengthy application online.

You will talk with more qualified leads, which will happen if you follow these suggestions.

1. Send Joe an Email to Learn More Qualifying by Phone ... Or phone me, call 502 396 9204

2. Join the LinkedIn community at Franchise Prospecting for more conversations on franchise sales techniques with other franchise sales professionals.

3. For the 5 Most Fascinating Stories in Franchising, a weekly report, click here & sign up.

Are there some franchise systems which women gravitate to?

Should franchisors be making more of an effort to attract women as franchisees?

For the 5 Most Fascinating Stories in Franchising, a weekly report, click here & sign up.

It is no surprise that to many franchisors that selling franchises is hard work

But, they might surprised by David Brock's analysis of just what is wrong with their sales process.

Untitled 2.png

Kerry Miles says:

Blaming inadequate sales people for lack of sales is an easy one.

My questions are around ''what about the viability and strength of the franchise brand?''

My observation is that strong viable brands with profitable and satisfied franchisees have little trouble selling franchises.

It's floundering systems or brands in declining economic sectors that need aggressive sales techniques. If you want to know why read this.

Read the replies to Kelly on LinkedIn

If you would like to know more about Recruiting Franchise Prospects by accessing the LinkedIn database, then just sign up for our weekly newsletter.

This was originally published by Joe Caruso, on February, 2017.

We put distributed it on LinkedIn in late May, 2017. With some success. However, on March 2018, we received 3,877 visits via search.

You just never know when you are going to be really popular!

Personality Assessment for Franchisees

Which are the most effective personality assessment tools for Franchisees?

Can you screen out in advance prospects who will be bad owners?

What has worked for you?

Any suggestions?

  • Joe Caruso

    Joe Caruso You may want to start with this article - "Uncovering The Secret History Of Myers-Briggs"

    The author Merve Emre has some interesting and shocking things to say about relying Myers-Briggs.

  • Nancy Friedman, Keynote Customer Service Speaker MB is good. But IMO. The DISC. Profile is simpler - easier - more fun - and results oriented. Just saying.

  • Joe Caruso One of the common criticisms of Myers-Briggs is that a person can take the test on Monday and again on Thursday and get two very different assessments.

  • Nancy Friedman, Keynote Customer Service Speaker

    Nancy Friedman, Keynote Customer Service Speaker Yes. And 99% of the time DISC nails it every time You're right joe.

  • Michael Biggins I am struggling a bit to apply these profiling tools to franchisees. But I am open and willing to be convinced. (Just sayin'). I agree that being a franchisee is not a good choice for everyone and there are certain characteristics and capabilities that make a real and important difference. I see way too many people buy into a franchise that is not 'right' for them or when they are simply not prepared for what it will take. Thoughts?

  • Joe Caruso

    Joe Caruso Not sure that DISC is any more reliable than Myers-Briggs.

    "Personality Scores and Job Performance

    Are scores on personality tests highly predictive of performance? There is a long history of research showing: maybe. That is, if the employee has all the other performance elements necessary to do the job, and the personality test is job-related, personality can make a difference. Self-descriptive test scores represent how the applicant wants to present themselves -- it may not be reality. So, even if an applicant tells an interviewer he/she is organized, it's no guarantee he or she will be good with details. It is just bad science to claim the DISC (or any other personality test) will accurately predict managerial performance, capability for organization, character, or personal responsibility."

    Nancy Friedman, Keynote Customer Service Speaker
  • Nancy Friedman, Keynote Customer Service Speaker Disc is not a personality test. Its work style. Pretty accurate in my life time. Always room for improvement as we know. But pretty good

  • Monique Hernandez When it comes to discovering individual and organizational personalities, I highly recommend the Myers Briggs personality assessment. Given the persons being assessed understands that the questionnaire is not going to be spot on but everyone has a preference. That preference is key to receive accurate results. I've turned to this assessment when I've noticed a team is having difficulty understanding one another, or the team is not understanding myself. The time spent doing this and openness brings everyone together. I suggest Myers Briggs ! True believer

  • Michael (Mike) Webster @Monique, what have you used MBI for? Thanks.

  • Greg Nathan A couple of thoughts. The Myers Briggs is an awesome tool for leadership and personal development. It is useful as an adjunct in recruitment, but will not predict performance. Just how someone will probably approach their work.
    DISC is also a great tool for management development. Be careful using it as a predictor of performance. Again it will tell you how someone will approach their job, not the outcomes they will get.
    There are several profiling tools that have been developed from solid research into franchisee performance. We have one at the Franchise Relationships Institute that is part of a total recruitment system called The Nathan Profiler, and Fred Berni has one that I think is called The FranchiZe Profile.
    Don't rely on a personality profiles alone. Structured interviews, on the job trials and past performance are also useful to consider when trying to predict future performance.
    By the way I am a registered psychologist with 35 years up my sleeve working with a range of these types of tools, so I speak from experience, not hearsay.

  • Vivienne Beech Love the Nathan Profiler but also really like Ripe Strategies system by Lynne Schinella

  • Michael (Mike) Webster Vivienne, what do you use these profilers for? Thanks.

  • Michael (Mike) Webster

    Michael (Mike) Webster Greg, what we have seen in the franchisor sales departments is an extreme reluctance to do anything which would cut down their pipeline.

    It makes sense to filter using a tool which assesses expected performance, like your tool & Fred's assessment, but we have found sales departments very reluctant to employ them as part of their screening process.

    So, I wonder if these predictive assessment tools aren't more usefully deployed right now as part of the onboarding process, by the operational folks.

  • Mary Clapp

    Mary Clapp In my experience the personality assessments can be useful if they go both ways. The tools are supposed to help people understand how to communicate better with each other. For a franchisor to understand if a franchisee is likely to be a good fit for the system's style of communicating and making decisions, the franchisor has to understand the personalities of the decision makers and key ops folks in the franchise system, as well as those of the franchisee. Sometimes a change in the zor management is necessary. If the franchisor isn't considering that as a possibility, it probably won't matter what the zee assessments say.

  • Bernie Moscovitz

    Bernie Moscovitz Think the best application is A DISC/PIAV or Behaviors and Motivators. Goes beyond the basic personality assessment and adds personal interests, attitudes and values.

  • Greg Nathan Michael - your observations are correct. The priority for most franchise sales folks is to hit their recruitment numbers. Better quality operators factor in franchisee suitability as an equally high priority. Having operations folks also involved in the recruitment process acts like a conscience and balances the short term and longer term perspectives. (The ops folks have to live with the franchisee long after the recruitment folks have handed them over, so to speak). And I agree, using profiling tools for onboarding, coaching and improving communications is very useful.
    Mary Clapp's comments are, in my view, all spot on.

  • Mariel Miller The FranchiseAdvisor I've been in organizational devel for franchisors since 2000, have seen many products in this space...I'd be happy to discuss my experience & share with you an objective workshop I've delivered to USA franchisor groups about this topic - [email protected] 732 4811-5188

  • Ron Bender, CFE

    Ron Bender, CFE I have used (and taken!) many, including MBI, DISC, Wunderlic, ProvenMatch and Spot-On, and I think your development staff can be trained to get great use out of all of them. I love the newer, more 'workstyle and communication-related' programs like ProvenMatch since they become very useful for better training and coaching after they become franchisees.

  • Michael (Mike) Webster

    Michael (Mike) Webster Mariel, have you got a link to your seminar? Thanks. You could post in your comment.

  • Mariel Miller The FranchiseAdvisor
  • Michael (Mike) Webster

    Michael (Mike) Webster Mariel, you are welcome.

  • Greg Nathan

    Greg Nathan Mariel - I just looked through this. It looks fascinating but is a bit hard to follow. Can you explain the context?

  • Thom Crimans Check out Proven Match. DISC, Myers Briggs and such are fine, but they are off the self products used for a wide variety of purposes. Proven Match is specifically designed to determine a prospects fit to your business model. Here is the link from the IFA website: Or contact [email protected]

  • Craig Slavin The oldest and most reliable franchise profile is the Franchise Navigator. Launched in 1997, after 7 years of research, Franchise Navigator has had incredible success with its clients.

  • Fred Berni

    Fred Berni Greg - Thanks for the mention.

  • Craig Slavin

    Craig Slavin Let me know if anyone would like to "test-drive" the Navigator. It was built from the ground up for franchise application. It is also not a "generic "psychometric" assessment but actually becomes customized to each brand that uses it.

  • Mariel Miller The FranchiseAdvisor Certainly, I was asked to present an objective picture of assessments in the franchise space and discussed several valid and reliable instruments and how they would fit inside the recruitment process - The focus was how to work with an instrument and how to have a better process including "fit" even without an instrument. The key issue is how valid the assessment is and can it, in fact, predict future behavior. There are a good number of valid tests out there, but a franchisor should ask a lot of questions about how long the instrument has been used, how long specifically in the franchise sector, and ask for white papers, studies, etc. to insure the tool is appropriate for selection. Contrary to some commentary, personality has been proven to predict "job performance" in many studies. So has an individuals Value System. Tons of research is out there supporting this. Hope that helps put my work in a bit of context.

  • Daniel Alberto Bernard

    Daniel Alberto Bernard Here in Brazil we use our own Teste Aldeia Gaulesa. It was based upon studies developed by professor Yves Enrègle, Ph.D. on Psychology and Sociology from Harvard and my professor at Groupe ESSEC in France in the early 90´s. We selected more than 10,000 franchisees by using this very accurate assesment test. It represents an evolution from PEAI and considers laboral relations later from the digital revolution from the mid 80´s. Just check the portuguese version at|conteudo&id_conteudo=2

  • Dave Sullivan

    Dave Sullivan I currently use SpotOn by Zoracle. It has proven to match my candidates with concepts that line up with their competencies and compatibility. When I match a franchisee who shares a company's Values, Stages of Growth, Culture and Work Style they perform better and ramp-up quicker.

  • Jan-Marie Hall

    Jan-Marie Hall Hello Everyone - Proven Match is a scientific based assessment since 1987, designed specifically for Franchising to help you know the characteristics of your to top performing franchisees which helps you measure your candidates to their attributes.
    Proven Match also help you with talking styles to get the best out of all your franchisees plus where to market to attract those top players.
    I would be happy to give a demo or connect you with a franchisor using Proven Match

  • Craig Slavin Since 1987? I would check on your statistics. Proven Match was launched 5 or 6 years ago at best according to the creator.

  • Craig Slavin

    Craig Slavin Spot-On is less than 2 years old.

  • Simon Lord

    Simon Lord Most franchisors I have talked to who started off using general profiling tools stopped using them after a while as they didn't accurately reflect the peculiarities of the franchisor/franchisee relationship. I'd recommend looking at the Nathan Profiler

  • Craig Slavin

    Craig Slavin Here's my take on using assessments/surveys in the franchising space. First, using one is a better idea than not using one. Anytime you can "model" something and be able to replicate it you are likely to be in a better position. Secondly, based on my experience, research, creation, usage and administration of a Behavioral Recognition Assessment called, the Navigator, I personally feel the value of an assessment/survey comes in the ability to use, adapt, and leverage the results. Most of the data, and results, of assessments/surveys becomes either under-utilized or misunderstood. The focus should not be solely about the assessment/survey but should address how to implement the recommendations in real life situations, with franchise operators, employees and others that participate in the franchising efforts.

  • Michael (Mike) Webster

    Michael (Mike) Webster Thanks to everyone who contributed to this thread.

    .1.We made a feature & highlighted it at:

    .2. It was also in the Franchise-Info newsletter.

  • Greg Nathan

    Greg Nathan Wow that 's been a wild ride. Enjoyed looking back over that thanks!

  • Fred Berni

    Fred Berni I apologize in advance if this appears as a duplicate post. I've been told that my original post didn't appear in this thread which is strange as I can see it.

    Ulf - Let's start with the basics.

    First, decide whether you want a tool designed to give you information on "cultural fit" or are you more concerned with performance? The two are not the same. If you're looking to see if a person is a good cultural fit, then likely any "personality" profile will do the trick.

    If, however, you're looking to find out if your candidate will perform, then one of the best ways of identifying how a person will do in a specific job is to measure their skill-sets and their job-specific judgment. Since every job has a unique set of situational judgment needs and skill-sets, no single questionnaire can accurately be used for multiple jobs.

    Continued in next post....

  • Fred Berni

    Fred Berni The reason the FBI uses job-specific judgment questions in their agent hiring process is because it's so accurate in predicting performance. That's also why we include situational judgment in our FranchiZe Profile.

    Second, make sure the system under consideration was actually designed for selection. Several of the most common personality profiles specifically state on their websites (Meyers Briggs) or in their validation documents (DiSC) that they were not designed for selection. The Meyers Briggs site even goes so far as to say it's unethical to use it for selection. Even so, people are using these profiles for selection purposes.

    The article Joe mentioned in an earlier post does a good job of explaining these first two issues.

  • Fred Berni

    Fred Berni Third, if the "test" you're considering doesn't include job-specific questions you run the risk of running afoul of the EEOC and the ADA. The Supreme Court ruled in Griggs v. Duke Power Co. 401 U.S. 424 (1971): "What Congress has forbidden is giving these devices and mechanisms controlling force unless they are demonstrably a reasonable measure of job performance."

    Fourth, make sure the profile you're considering has been validated by an independent third-party with no monetary interest in the results. By validated, I mean proven to demonstrate that it does accurately predict performance, not just that it's internally reliable. Doing so goes a long way to cutting down on your risks with the EEOC.


  • Michael (Mike) Webster

    Michael (Mike) Webster Thanks for adding in these ideas, Fred.

  • Alan Branch

    Alan Branch As a franchisor for a new franchise system, we organised for a Psychologist to sit in in several recruitment interviews and then give an independent observation on what is needed both for our interview techniques and the answers from applicants. Just like developing critical business software, if you can afford to do it yourself (with some help at the start) then you get a good result.

  • Craig Slavin

    Craig Slavin Alan, good idea in theory but if the Psychologist is not experienced in franchising and has never been in the "front lines" then it is either all theory or subjective based on his/her own set of rules. There is a huge difference between "theory" and "practical application" as it all relates to whether someone has the "right stuff" to execute a particular business model, especially for a new start-up franchisor where there is neither a lot of people or data to "model.".

  • Ulf Muller

    Ulf Muller Thank you, All for your great contributions. Following on from your input and my research I have come to a conclusion. There are three points which stand out:
    1. Having a Personality Assessment for Franchisees is better than not having one.
    2. Successful franchisees have specific personality profiles. An assessment tool which is targeted towards franchisees is better than a generic one.
    3. Assessment tools are not static. They develop with your network. Calibrating your assessment tool by assessing your best and least good performing franchisees is useful.

    Thank you again everyone. Have a great Christmas and all the best for 2016.

  • Craig Slavin

    Craig Slavin I don't believe Personality is the key. Our Navigator Assessments are Skills, Values and Behavioral based. Meaning, that if you can identify behavioral traits of a person it is an enormous insight that is not gained through a Personality Assessment. In franchising, it is all about whether an individual can execute a business model and that isn't personality based.

    Second, yes, a tool targeted towards franchise ownership is better than a generic one.

    Your third point is a little confusing. The assessment changes as the business model changes not as the company evolves. Sears has been using the Navigator for 18 years and their analysts have re-validated the Navigator Profile 4 times. Also, looking at just the best and least good is also not a valid indicator. You must look at everyone - the High, Mid and Poor performers and a valuable assessment talso shows how to turn mid performers into higher performers.

    Finally, length of time an assessment has been in usage is key.

  • Caroline Balinska - Digital Innovation Strategist

    Caroline Balinska - Digital Innovation Strategist I did an awesome interview with Craig Bissett about choosing franchisees with assessment tools. It is definitely with listening to

A franchisor needs to have an exclusive conversation with a prospective franchisee.

You don't get a sale until you have that exclusive conversation, dialogue or discussion. The sooner you get to the exclusive conversation, the shorter your sales cycle.

Many Vice-Presidents of Franchising know that their lead generation marketing mix and budget is not producing, but they don't why. Their sales cycles are longer and cost per acquisition is higher.

Some Franchisors rely too heavily on franchise web portals for leads. It is a mistake for capital intensive franchises to use web portals for prospecting. These franchisors need to rebalance their marketing budgets by including a significant portion for outbound marketing.

Sales Funnel.png

Why Web Portals Don't Work for Capital Intensive Franchises- The Web Portal is a Numbers Game

Franchise web portals are a popular way for franchisors to generate inquiries that hopefully turn into leads.

The VP of Franchising uses a web portal because he or she believes sales is just a numbers game. More inquiries turn into more leads and therefore more sales. This is simply not true.

Wasteful spending on franchise portals shows this.

The web portals do not create the necessary exclusivity.

A capital intensive franchisor will take time and effort to construct a compelling landing page which cuts through the clutter of other franchise concepts for sale on the web portal.

They take advantage of the web portal's filtering to ensure the most qualified candidates inquire.

They train their sales team to promptly follow up by telephone and email all the referred inquiries.

Suppose that the franchisor is successful in creating a compelling landing page and messaging. The most qualified candidate, talented with capital, takes the time to accurately complete the web portal inquiry form.

Now that's fantastic right? No.

Not so fast, something else happens. The inquiry from the prospect with talent and capital gets intercepted. Intercepted you ask, how and by whom? By the franchise web portal.

That valuable candidate who you attracted is also attractive to your competitors. The web portal operator knows that and will sell or deliver your candidate to your competitors.

One way this works is the following. The candidate finishes the portal's inquiry form qualifying process, and then gets a pop-up-box with suggestions for other franchise investments for them to consider and automatically submit their information to.

Now it's off to the races and the first franchisor to move the candidate from the digital world to the physical world where one-on-one over the telephone a franchisor can build a relationship and then the sale.

Seems a little unfair that you won the candidate's attention for your concept only to lose out to some other franchisor who got them on the telephone first.

Closed deals are a result of exclusive conversations with prospects.

Smart Franchisors don't send their best leads to their competitors.

(If you liked this, you will want to know more about prospecting: Using LinkedIn to Sell Franchises -a Course from Franchise-Info

A no cost course with 13 lectures delivered to you directly by email)

How to Qualify the Capital Intensive Candidate

Back in the 1990's, when "inbound marketing" was once again in fashion, I was working development for a large QSR brand.

Our prospective franchisees or candidates -we never referred to them as "leads"- called us on a land line. Sometimes, they would even fax us.

You must imagine this: A candidate needed to meet or exceed a net worth of $1 million to qualify for our development. I had to figure out whether they would qualify - over the phone.

Caller-id was no more revealing then than an email address is today. You could work for weeks with what turned out to be great candidate - except that they could not meet the financial qualifications.

What I learned, quickly enough, was to use a simple method to get people to truthfully reveal whether they were qualified or not. All over the telephone, using no other source of information.

The Secret Technique

I can reveal this method to you today - it still works.

You ask the on the phone - "Do you have a net worth that meets or exceeds our financial requirements?" at the exact right time in the sale process - after they have raised their hands and asked to go forward. People will truthfully reveal their financial qualifications - if your sales process is thoughtful.

(We actually had a terrific candidate who wasn't financially qualified. But we were able to match his talent with other capital - another story for another time. He is now a very successful multi-unit franchisee and a highly respected franchisee leader.)

The secret technique was waiting for, what my business partner Michael Webster calls, the Signal of Commitment. Only after I heard the right signals, could I ask for and get a truthful revelation of their financial qualifications.

Why Websites Don't Work

Contrast our ability to listen to a real human asking real questions about the business opportunity to what we ask for on websites.

Here is a representative application to a capital intensive franchise.


You have already asked the candidate whether they were qualified - using a form on the internet!

How many worthless inquiries is this going to produce? Too many - but too few leads.

Your application process lacks grace.

You don't get the deal done with someone who is only committed to filling out a form on a website.

You don't get people to faithfully reveal their finances to a computer screen. (And if they do, they are completely oblivious to the costs of privacy.)


No, the only way to do capital intensive franchising is using old fashion technology - listening, waiting the signal and then asking for the commitment.

If you liked this, you will really like: Using LinkedIn to Sell Franchises -a Course from Franchise-Info (A no cost course with 13 lectures delivered to you directly by email)

Here is an email I recently received.

Note that I live in Maryland, USA and not Ontario, Canada.

Chem-Dry, the world's largest and highest rated carpet and upholstery cleaning franchise system with 3,500 units in 35 countries, has recently opened new territories and will be exhibiting and recruiting new franchisees at the show.

The show is being held at THE INTERNATIONAL CENTRE in Mississauga, Ontario on September 7th and 8th. ChemDry has been ranked the #1 carpet cleaning franchise by Entrepreneur magazine for 25 consecutive years.

With our proprietary hot carbonating extraction cleaning process and ongoing marketing and operational support, ChemDry is a franchisor that helps you grow.

We offer in-house financing with as little as $9,995 down and total investment starting at $41,000.We also deliver top-line results.

Check out our average franchise sales numbers:

How Much Can I Make with a Chem Dry Franchise.png

Usually, I would simply look up the franchisor's FDD and compare this earning's claim with the Item 19 claim.

But, this is a much more difficult case. I don't know much about the Ontario Franchise Disclosure law - except Webster tells me it that it is for lawyers and not franchise investors.

So, I looked up the Item 19 for Chem-Dry in the US, How Much Can I Make.

First, the Item 19 is not based on the franchise owner's reported profit and loss statements.

"HRI does not currently require all Chem-Dry business franchise owners to provide periodic revenue and other financial reports concerning their franchises.

In February, 2013, HRI conducted a system-wide survey requesting that all franchise owners provide certain financial and other information relating to the operation of their Chem-Dry business franchises during 2012.

As of December 31,2012. HRI had 1,081 franchise owners who operated 2,039 Chem-Dry business franchises.

Of those, 211 franchise owners (the "Responding Franchise Owners"), who collectively own 475 Chem-Dry business franchises, and who have owned their businesses at least 2 years, provided complete 2012 financial information in response to the survey and operated those franchises throughout all of 2012."

Second, and it gets more tangled, here is the chart from the survey, click on it to expand it.


The average revenue number reported from the US survey as representative to Ontario prospects is the same: $111,184!

It is it all all plausible that the 211 franchisees who completed the Chem-Dry survey in 2012 forms a reasonable basis to tell a prospect in Ontario what he or she might make?

Perhaps some franchise attorney in Ontario can tell me?

For the 5 Most Fascinating Stories in Franchising, a weekly report, click here & sign up.

What was in the air yesterday?

Two people called to discuss converting their business to the franchise model (which, considering my business, is not unusual) and both wanted to offer very low franchise fees. That's discouraging because I don't think they are doing the research necessary to be a really good, sustainable franchisor.

Let's look at both sides of that decision.

The potential franchisors said they were offering part time or adjunct businesses to people who weren't "professional business people" and so, couldn't afford a higher price.

They also felt that they could award more franchises at the lower price. On face value, those seem to be sound reasons. But let's look deeper. Franchise fees are a combination of value statement, practical cost containment and marketability.

We'll address the marketability first.

Many new franchisors do only this step without realizing what goes into the price and we will address that next. When you are shopping franchise fees look beyond your direct competitors.

When people look at franchises they look at several different verticals that share a common start-up cost, so you need to look beyond your market and see what's out there. Once you know what the market will bear, you have to look at the components of those fees.

The franchise fee is a buy-in fee. The franchisee gets the right to use the brand, marks and system of the franchisor for a defined time, so long as he abides by the system rules. As it gains fame and following, its value increases. That takes time and huge market share to move the proverbial needle.

The second component is cost containment and this one takes work. The franchisor has to determine the opportunity cost for selling the franchise. The opportunity cost includes the marketing costs, sales costs (commissions/bonuses, pro rata payroll costs, broker fees, etc.) and training costs, including a pro rata share of the trainer(s) payroll, training material, space rental if needed and start-up materials.

Think it through, price it out: You might not make money on franchise sales, but you shouldn't lose money. Now that you know what goes into a fee structure, let's look at the downside of low ones.

1) The perceived value of the brand is diminished by the lower price. No matter how you justify it, the perception is that the franchise not only costs less, it is worth less. Even if a part-time business, the brand has value.

2) Low barriers to entry are also low barriers to exit. If the franchisee is not significantly vested in the franchise, it will be too easy to walk away the moment things get tough. At the very least, it will be too easy to drop at renewals.

That means the franchisor constantly to pay full opportunity costs to keep franchise levels steady - there are no economies of scale. You will also have to disclose your turnover for years, and that can deter sales.

3) If your franchise fee does not cover your opportunity costs, you will start every franchise relationship at a loss. Before you decide to do this, calculate how long the average franchisee will take to ramp up, pay adequate royalties and offset the initial loss. If you sell several at once, can your company absorb the loss? Can you wait that long? And will the lower cost result in enough sales volume to offset the amount of time you wait to be positive on that investment?

4) No matter the size and return of the franchise, be sure to choose only those candidates who embrace your values, respect your system and have a true commitment. Every time you bring in a franchisee that is not qualified or dedicated, you wound the brand and the good franchisees you do have. That will drive out those good folks fairly soon. Bottom line: Price yourself in a way that makes financial sense for you, creates value for the franchisee and markets the respectability of the brand.

Think long-term and be proud of what you built. If you are not ready for that, you might not be ready for franchising.

For the 5 Most Fascinating Stories in Franchising, a weekly report, click here & sign up.

LinkedIn is often seen as the place to go if you're recruiting new employees or searching for a new job -- not necessarily as a place to grow franchise sales. However, when you think about it, a franchise sale can be considered a new employee or someone looking for a new job. It makes sense that the number one social network for business professionals is also be the number one place for your franchise to grow.

According to the 2014 Franchise Development Report:

  • 42% of franchise sales are from the internet
  • Franchise sales generated through social media have 267% YOY
  • 40% of social media franchise sales originated from LinkedIn

If your franchise is already pursuing sales on LinkedIn, you're ahead of the game; but if you aren't, you're missing out on an area of opportunity.

No matter what level you are at, you can improve your franchise sales through LinkedIn with our starter kit. You can also download our printable cheat sheet to keep handy and track your progress.

1. Make LinkedIn a priority

Before your decide to start using LinkedIn -- to showcase your business and raise its profile to new franchisees -- you need to commit to it. I'm sure you already have a designated time where you check your emails and follow up on phone calls, you should also allocate time in your day (or week) to check-in and work on LinkedIn.

Once you make LinkedIn a regular part of your schedule, it blend right into your day-to-day activities and your franchise will start seeing positive results.

2. Investigate your competitors

It is always a good idea to stay up-to-date on what other franchises similar to yours are doing in the online marketing arena and LinkedIn is no exception. Start looking into how your competitors are using their LinkedIn company profiles and it will help you come up with new ideas about how you can grow your franchise. Whether you are the first or last one to the game, you will learn how they are positioning themselves toward a target audience (which may or may not be yours).

Make sure to take detailed notes, including:

  • Uploading pictures
  • Posting regularly
  • Sharing files
  • Listing specialties
  • Other tactics that help them stand out

These notes will help form your LinkedIn strategy to increase your franchise sales. While I don't recommend you copy your competitors verbatim (after all, you do have your own unique market proposition), seeing what others have done is always a good jumping point and can help you brainstorm ideas about what to include on your own page.

3. Have a profile that impresses

After you are done taking your notes, its time to analyze and implement your strategy to create a profile that grabs the attention of your target audience.

The best way to optimize your profile is simple: fill out each applicable section with the required content -- and don't do a half-a*s job! By putting the extra effort in now, your profile will get more bang for its buck and bring in more prospects.

For example: be sure to list any non-profit organizations that your brand supports under the "Volunteer Experience & Causes" section of your personal profile. You never know if a certain charitable affiliation will resonate with someone and be the reason he/she reaches out to you.

4. Showcase your franchise

LinkedIn showcase pages allow you to focus on the opportunity your franchise offers.

While your company page focuses on your brand as a whole, your showcase page is a good place to sell prospects on the many benefits of your franchise -- and how it can help them. Take a page out of your sales toolkit when creating your showcase page and start generating leads.

5. Update and engage

On both your company and showcase pages, you need to stay active and engage your audience by sharing useful and helpful information about your franchise, as well as any positive press your business receives. If you are dedicated to these pages, they will always be up-to-date so that prospects never have outdated information.

In addition, by regularly updating LinkedIn, you will also integration the platform into your regular sales routine and help increase audience awareness. When possible, you should go beyond your own page and join groups where you can network with others in your industry and discuss challenges and share success stories.

Bonus: Upgrade

If you want to give your account a boost, you can sign up for LinkedIn Premium which will give you a laundry list of sales perks. While this isn't necessary for everyone, when you start seeing success it can help you keep the momentum going by giving you access to advanced search and in-mail features, as well as the ability to send messages to almost anyone with a LinkedIn profile (connecting you with even more prospects).


Taking advantage of LinkedIn for your franchise sales can help you extend your process in front of entrepreneurs searching for their next step. Some of the challenges you face from a sales perspective can be tackled with LinkedIn's ability to connect you with your audience and groups throughout your community.

Download our LinkedIn Starter Kit and make sure your franchise is in front of users who are searching for their next business opportunity. Download Now

For the 5 Most Fascinating Stories in Franchising, a weekly report, click here & sign up.

Validation can take up an enormous amount of time when recruiting new franchisees.

Most all prospects want to hear from existing franchisees about their experiences and get answers to their burning questions. If you let prospects call on a list of your key owners over and over, those franchisees would never get their work done!

There is a simple way to speed up the validation process - use a validation video. The key benefit of using a validation video is reducing the validation process from days (or weeks) to one step that can be completed in a single day or even less.

A validation video is the story of your Franchise as told by some of your current franchisees.

Choose some of your best, most experienced and diverse owners and film them addressing the same issues and talking points. When edited into a final video, you will have a totally credible presentation of your franchise from the owner's point of view

Be sure to have each of the selected franchisees address the same issues.

When a prospect can hear several owners answer the same question in their own words, there is no doubt about the authenticity and honesty of their comments - it is totally convincing. Plus, you still retain control over the message. You don't want to put words in their mouths, but you do want to avoid inaccuracies or misleading the potential buyer.

Franchisee Conventions are the perfect time to film validations as they are together in one space and a filming room or location can be dedicated to process.

Conventions are ideal because the owners are usually in a very positive frame of mind and you can select the best in your chain - especially if they are receiving recognition awards at the event. Another advantage of filming videos at the convention is the option of using the beautiful venue or resort as a backdrop for filming - after all, going to a great resort for a convention can be a powerful component to sway a prospect's decision.

Another option is using Skype to film and assemble the interviews. Using top notch digital cameras and quality microphones, Skype interviews can achieve excellent picture and sound quality that approaches live filming.

For the 5 Most Fascinating Stories in Franchising, a weekly report, click here & sign up.

Aranco Productions has been producing highly effective validation videos for many years and we would welcome the opportunity to discuss how we can help you produce your own validation video. It just might become the most effective tool in your sales kit.

I used to believe that franchisees and other business owners failed because they were under-capitalized, but I believe that's a myth.

Someone somewhere many years ago said that the main reason for business failure was under-capitalization and everyone picked up on that and it has continued to this day.

I don't believe it, anymore.

And with US disclosure laws, as well as the opportunity to speak frankly with active franchisees prior to investing in any franchise, there's plenty of opportunity for franchise prospects to learn how much capital they will actually need.

Of course, many franchisees do not do that, and that's generally an indicator that there are other worthwhile things they also won't do.

Here is what I believe to be the major issues.

  • First, many franchisors select the wrong franchisees, and

  • Second, many franchisors are incompetent at training and coaching franchisees.

  • Third, many franchise fees are too low.

All of those problems could be fixed and I'm happy to know franchisors who have addressed those issues and who have enjoyed more success as a result.

Most franchisors appear to be uninterested in matching a franchisee's skills and motivations to the requirements of the franchise business. Why? I don't know.

I guess it's another step in the recruitment process and franchisors don't like delaying that process.

Unfortunately their emphasis is on "sell now" and not "succeed later". I tell every prospect I speak to -- several thousand annually -- to run from a franchisor that does not formally address how their personality/skills/motivations complement the requirements of the franchisee's operation.

Others have mentioned the 35k franchise fee & it's not enough money to pay for the support and training needed.

People tend to think that franchisors use the profit from franchise fees to buy vacation homes, send kids to college, and drive expensive automobiles -- but that's not my experience (and I've worked with many dozens of franchisors in the last 30+ years).

Most franchisors lose money on the 35k franchise fee . . . and then they don't have the money to invest in the proper training and development of the franchisee.

Even smart people need more than a week or two to learn how to operate a franchise business, but franchisors don't see it that way -- takes too long and costs too much.

Unfortunately franchisors have the wrong focus. Making a sale doesn't guarantee making a profit . . .

Only making the right sale and then properly training and developing the franchisee over time will indeed generate long-term profits.

For the 5 Most Fascinating Franchising Stories, a weekly report, click here & sign up.

This could be your first day looking at franchises or considering a franchise distribution model for your business.

And if you went searching around the internet you will find all of these statistics and cliches in a variety of iterations.

Do you use any of these? Because Franchise insiders don't.

# 1 - US Department of Commerce Study shows 97% of Franchises vs. a 50% failure rate for independent businesses

Not so - The US Department of Commerce did not make this conclusion. Call and ask them. Bureaucrats tend to keep records they are proud of.

#2 - The median gross annual income, before taxes, of franchisees was in the $75,000 to $124,000 range, with over 30% of franchisees earning over $150,000 per year.

Not true and foolish - Median can't be a range. It is the exact midpoint of a range. It's impossible to support this assertion. Because you can't make a range a median.

#3 - US Small Business Administration study conducted from 1978 to 1998, which found that 62% of non franchised businesses closed within the first 6 years of their existence due to failure, bankruptcy, etc.

Unverifiable and likely not true - If you go to you can't find this information. You can find a lot of franchising people touting this as true.

#4 Owning a franchise allows you to go into business for yourself, but not by yourself.

It's trite - Franchisees are independent business owners and all of the owner's obligations are solely theirs. It's more like for franchisees and franchisors that - we are all in this together separately. When you succeed your franchisor will be happy to rejoice in the shared success. If you fail at franchising you will be an orphan and all alone in your failure.

# 5 Franchising is like a marriage.

No it's not like that at all - Marriages are supposed to be until death do you two part. Franchises are for specific term of years. You and your spouse make mutual decisions about what you'll do in your married life. In franchising your brand activities are prescribed by the franchisor. A marriage is between two people. If franchising was like a marriage then a franchisor would be a polygamist with multiple partners.

If you're using these 5 foolish franchise cliches you should stop. And if you hear someone use one of these cliches, turn around and run away.

For the 5 Most Fascinating Stories in Franchising, a weekly report, click here & sign up.

Who Makes the Best Franchise Operators?

| 2 Comments | 0 TrackBacks

Since the late 1970s franchising professionals have debated whether or not franchisees are entrepreneurs.

The debate still goes on; some claim franchisees are just employees who buy themselves a job, while others claim franchisees are just entrepreneurs who choose to buy a business instead of building one. Some people base their argument on the literal definition of the term "entrepreneur" while others go further and take into consideration its connotations.

You may say that it all boils down to semantics, so who cares, right? Well, all franchisors should care. This is not a philosophical or academic question; it's a strategic and operational one.

The term "Entrepreneurship" is not restrictive and unyielding; instead it's fluid and flexible. In franchising, we must look at this term not as an absolute, but more as a scale, not as the literal definition, but more as the complex concept it captures. And, the success of your franchisees, as well as their ramp-up and satisfaction, depends on how well you understand what the Entrepreneurship Scale means to your system.


Franchisees, like all people, are complex beings--each one holds a different combination of personality traits, experiences, expertise, learning styles, preferences, strengths, weaknesses, beliefs systems, and habits that make them unique. To hold the perspective that all franchisees are entrepreneurs or that no franchisees are entrepreneurs is equally dangerous.

Both premises are oversimplifications that can take a franchisor in a totally wrong direction. Instead, consider that every franchisee falls on a different position on the Entrepreneurship Scale.

Thus their success greatly depends on how well you define and mold your business model, the franchise sales process, the training and support programs and the tools you incorporate in your business so as to address these differences. If you don't, successful results will remain a game of luck instead of one of skill. It's just that simple!

Although franchise success starts with a valid business model, the success of individual franchisees begins with a clear definition of that model as well as of your culture, and furthermore hinges on your proficiency at granting franchises to those people who better match your company. For example, franchisees who are closer to employees on the Entrepreneurship Scale tend to get better results in a company that has a highly supportive culture and a more structured model with stricter controls, clearer benchmarks, and systems.

On the other hand, those closer to the entrepreneur end of the scale will be more productive in less restrictive systems. So, if tight controls are important to you, a person closer to the ultimate employee will be a better match for your company.

The irony and challenge of franchising is that most franchisors search for individuals whose traits are closer to those held by the ultimate entrepreneur. Let's face it, most of us prefer to deal with people who are self-motivated and totally committed to success. These people move faster through the sales process and are quicker to make a decision. Yet, this type of individual is by nature more independent. Think about it, the people who are more likely to invest in your system are the same people who will be most prone to resist the system in which they invest. On the other hand, those people who tend to be better at following your system are less inclined to choose business ownership, and thus to invest in your franchise offering.

Although the success of individual franchisees starts with a good a match, it doesn't end there. No matter how hard we try or how many tools we use to benchmark and select franchisees, there is simply no way to ensure a perfect match every time. After all, we are dealing with people and the reactions of the most predictable of human beings can't be fully anticipated at all times and under all conditions.

This means that franchisees are always going to be a mix, some closer to our ideal combination and some farther away from it. Therefore the success of every single franchisee ultimately rests on how well you adapt your system, training, communications, and support to each individual so as to empower him or her to follow your system as closely as possible.

The ultimate paradox of franchising is that in order to get the consistency and uniformity inherent in franchising, we must use tailor-made training and support systems.

Franchisees who are closer to the ultimate employee end of the scale will require more support, more caring, more direction, and more coaching and communication in order for them to be able to absorb the information and apply it. On the other hand, franchisees who are closer to the ultimate entrepreneur will need less direction, more listening, less structure, and if you want to keep them from deviating from your system, you have to keep a closer eye on them since they will have a greater tendency to do their own thing which can damage your brand and also cause them to fail.

So, does the debate about whether franchisees are entrepreneurs or employees matter? You bet it does! Success in franchising is crafted, not something that just happens by pounding franchisees to follow the system. Understanding the nature of franchisees and how they learn is a crucial step in designing franchising systems that engender success.

The post Are Franchisees Entrepreneurs or Employees? Why Should You Care? appeared first on InFraSu.

For the 5 Most Fascinating Stories in Franchising, a weekly report, click here & sign up.

This is a very simple question.

It was recently asked in a LinkedIn Franchise Group.

And I bet we all want to know the answer.

It would make it easy to build next years franchise marketing budget for franchise buyers if we just had a short-list.

Even better if it had a performance ranking.

There were almost 50 answers and comments to this important question.

Here's a selection of what franchising people said -

"I speak with franchise development departments every day and have found that they can fork out as much as 60% of the initial franchise fee in order to secure qualified franchisees (using franchise consultants, recruiters, etc.). Are there any databases of open territories for potential franchisees to search? Vice-versa are there any databases of franchisees in the market to open a new location?" Mike Mackin

"It has been my experience that you can "catch the bigger fish" through today's portals. The secret is working with your portal vendor and let them help you on the franchise investment levels that you post on the site. The best experience I have had has been with There numbers are a little lower, but the quality is very good. And don't forget that most consumers are not going to tell you what they really have in the bank until you get further down the sales process." Phil Mettra

"Portals are just another outlet for reaching your target, I don't think you can narrow down a specific vendor that does better than another. If the opportunity on the portal is attractive enough, the portal also ranks highly on Google for top keywords and it has healthy traffic stats (which the portal vendor can provide to you) then you have a winning vendor. You should always do your due diligence and ask those vendors to provide you monthly traffic to the page you will be listed and can even go as far as asking for the top 3 IP locations to ensure they are based in your market. Remember that candidates can come from anywhere but your digital presence, especially social and reputation, is what will give you the edge in higher investment brackets." Brendon Major

"My experience with the portals is that they sometimes work beautifully and other times they just dont. The exact same advert on one site delivers 10 leads and on another none. To be honest although I have met many "experts" I have never found one that has been able to unravel the mysteries of the portals." Sean Goldsmith

"Just wondering if there are other portals more likely to reach and succeed with the higher investment prospects? I believe in a strategy of creating presence and buzz for your brand, with a wide digital presence probably now being the top tactical priority" Kevin Kruse

"I may have a bit of a different take. If a company is looking for "high dollar" candidates, I suggest the you will find them better using highly target public/media relations campaigns, instead of portals. As noted above, using portals to find YOUR candidate is a bit like fishing in the Atlantic Ocean with a single line, a bobber, a safety pin, and a piece of corn as bait. They simply are not designed to find a specific type of candidate. They have tens of thousands of names/inquiries, but they simply cannot be targeted to YOUR candidate. It is MUCH better to design a PR/MR program that targets YOUR candidate BEFORE the person even starts looking for a franchise. By the time a potential candidate hits a portal, you are already competing with hundreds of other franchise companies. Right? Portals have a role, but not for finding a specific type of candidate." Dr. Michael (Mick) Riddiough

"Before you start your campaigns, it is good if the portal can offer statistics for the locations where you are listing in, because different categories work in different locations. The categories can change every 3 months, so it is important to keep on top of the statistics and results. Another point which might help, is that franchisees don't always come from franchise portals, our web portal is a business and franchise for sale portal, mainly because some people are looking for any business opportunity and inquire about the franchise opportunities on the website. It is a larger net to catch enquirers. I hope this is helpful in understanding web portals and how to run a more successful franchise recruitment campaign." Paul O'Brien

"That is great advice, and I like your approach to testing adverts and then placing the most highly effective ones. The big stumbling block is how forthcoming the portals are with their stats. I know in the UK you would have an easier time asking the Pope for his hand in marriage. Are the US portals more forthcoming?" Sean Goldsmith

"I have sold several franchises for clients with an investment level of $400k-$800k by using portals.Granted, there will ALWAYS be the prospect that overstates the amount of capital they have available and you have to just move on and keep on dialing. There hasn't been one portal that seemed to bring in more qualified leads on a more consistent basis than another. I do seem to spend a lot of time chasing credits for pay per lead sites that claim they "verified" leads before sending them, but by and large every portal site seems to do a fairly decent job for me." Tom Parks

"The biggest issue which all Franchisors are facing about this approach is the cost. Some websites in Australia are offering packages which help Franchisors to do this at a more cost effective price. Keep an eye out for this. Otherwise the only other advice I can offer on this is to keep track of leads and quality of leads which are being generated by the website. One of our clients mentioned to me once, from 1 website they had received heaps of leads, but didn't generate any solid leads, while from another they received only a hand full of leads in the month, but 2 of the lead had converted to solid leads" Paul O'Brien

"How helpful are portals in generating qualified leads? My experience tells me that really depends upon your brands investment range. Generally speaking the top 5 portals basically cost the same amount to advertise on them. However because of my sector "automotive" vs "food" the portal is unable to generate me enough leads to make the potal investment worthwhile. I understand the ratio on portal leads to be 200:1 or even 250:1. It would take years for a portal to drive me that much traffic. At which point I would have spent far more than the inital franchise fee in marketing dollars." Lee Oppenheim

"Portals definitely "had their day", i.e. in the late 1980's through the early 1990's. They were THE way to market one's franchise. Today, however, they have become quite common place in our industry, and while there definitely are differences among the wide range of portals, overall, the range of inquiries to sales, as Lee mentions, is in the 200 - 250 to 1. In some ways, portals have become today's franchise "classified ad" section of the Internet. And, it gets very expensive to hire high quality sales people to field these return phone calls. As Franchise Update points out in its 2013 annual marketing survey, the total advertising placement cost associated with one sale these days(for their surveyed companies) was around $13,000...not including personnel costs. Is it the same today?" Dr. Michael (Mick) Riddiough

"Something to be careful with which you might not know about. Make sure that the website which you are using doesn't use a technique called lead thinning. This is when the website generates 1 lead and farms it off to multiple franchisors on their website. Usually the person making the enquiry doesn't know that this is happening either. The way to identify this is when you start calling a lead, the person will say something like "I didn't inquire about your franchise or business". This makes the website look good because of the number of leads generated, but the quality of leads is decreases dramatically." Paul O'Brien

"Terrific dialogue everyone....... portals? To use or not to use...... I heard a lot of "casting a wide net" as well as "be specific in your targeting, e.g. Veterans" , which leads me to a conclusion I've reached before: we are in a challenging, competitive environment for sourcing qualified leads which turn into franchisees. At least we have a forum for discussing our strategies and tactics. Thanks for the insights....." Kevin Kruse

"The specific answer to Kevin's specific question is "No" least not by design and not very productively...and it is likely to be quite expensive for the franchisor. I once had a franchisor client in which the "all in" cost was $1.4MM. We did quite well with it. Did we use portals? Yes, as one avenue, and it was truly "dialing for dollars". We did much better with highly focused PR/media relations in terms of finding "high value" candidates." Dr. Michael (Mick) Riddiough

"I disagree. Portals work. You already used portals for your client, even in light of the reality that it's 'dialing for dollars.' Hey, it still takes 35 tons of ore to smelt one ounce of gold--all you have to do is make 200 enthusiastic dials. Big deal. Get with the idea that selling takes concerted effort, and plenty of money. If the average cost of sale (not including commissions) is around $12,000 or so, the obvious path is easy: pick 3-4 top portals;" Paul Stewart

"Your approach works for you, and that's great. I take a different route, and that works for me and my clients. I don't think one is right and one is wrong, just many ways. I prefer more targeted and efficient ways of finding the right candidates. "Dialing for dollars" is simply not my preferred way" Dr. Michael (Mick) Riddiough

"Yes, absolutely, portals work for generating some quality leads that result in Franchise sales for the Franchisor at the investment levels stated" Ronald Silberstein CPA and CFE

"Portals are only as effective as the sales team that are working them, and the matrix you use to measure. Keep in mind the higher the investemnt the fewer the leads you can expect so it is important that your team devote the necessary effort into follow up with each and every lead that comes through." John Byron

"I would say the portals are only as good as the marketing team who works them and and the adverts. If the proper research hasn't been performed before the advert goes up, there is no guarantee of success" Paul O'Brien

"Simple answer to a simple question.. The answer is yes, you have to be in portals. You can add filters to any portal to try to catch the investor you are looking for. Portals are one leg of a triad that you need to build to reach your target customer." Dale Waite

I am glad we solved the riddle of getting high net worth franchise web portal inquiries.

Okay maybe there wasn't a simple answer to the simple franchise web portal question.
Here's some of what I think about the topic.

Franchise inquiries from web portals are minimal expressions of interest.

They are not leads.

You can't designate an Expression of Interest a Franchise Lead until you've qualified them.

The most reliable way to qualify them is to talk with them.

Franchise-Info has some ideas for you to work on this problem.

If you call me we can discuss two things -

  1. What to do with all your inactive inquiries who have expressed an interest
  2. How to attract Franchise Buyers online

I am easy to reach at 443.502.2636 and [email protected]. I answer my own telephone. And I call people back.

For the 5 Most Fascinating Stories in Franchising, a weekly report, click here & sign up.

Following up with franchise inquiries is such hard work.

If you've done it you know what I mean.

You get more no answers, hang-ups, unreturned calls and people who say they never heard of you or your brand when you make outbound follow up calls than you do get franchise sales successes.

These follow up calls seem more like the most dreaded practice in sales "Cold Calling".

We don't like getting "Cold Calls" from salespeople.

Salespeople of all stripes hate making "Cold Calls".

What I am about to say may seem counterintuitive and you might not like it - I think you should treat every Franchise Inquiry Follow Up as a "Cold Call".

Cold Calling.jpg

That's right, it's a "Cold Call".

But you say 'no the Franchise Inquiry is someone who wants to buy my franchise and that's what the lead supplier promised me'.

Okay then why is it so hard to get these hot prospect Franchise Inquiries to answer and return calls?

Let's stipulate that the Franchise Inquiry can't be considered a Franchise Lead until you talk with them and qualify them.

So here's what you need.

You need to know 2 basic things about your Franchise Inquiry to be true -

  • Good Email Address
  • Valid Telephone Number

Armed with the basic Franchise Inquiry information here's what you do.

Write up a voicemail script first since you'll be getting your Franchise Inquiry's voice messaging service most of the time.

Your message is about you reaching out to them about [insert franchise brand] and you'll be calling them back.

You may get lucky and some of your Franchise Inquiries will call you back. And from time to time you get to be pleasantly surprised.

However it's self-deluding to think that Franchise Inquiries who are being chased by other franchise sellers are going to call you back.

It's your responsibility to get them on the telephone.

When you get them on the phone don't sell. It's not time and the Franchise Inquiry is not ready for a pitch.

Your job at this point is to confirm your Franchise Inquiry's interest in your brand and are they qualified to invest in your franchise.

The close on the 1st call with a Franchise Inquiry is confirming a date and time for the next call in your franchise sales process.

join us.jpg

If you would like to know more about Prospecting for Franchise Recruits by accessing the LinkedIn database, then just sign up for our weekly newsletter.

One of the biggest complaints I hear from franchise salespeople is

"I have been leaving messages for Franchise Inquiries and they don't call me back.

What can I do about it"

Well the first thing you can do is stop expecting Franchise Inquiries who have never spoken to you, don't know who you are and are unsure about franchising to call you back.

You're just not that special. So stop it.

And quit sending insipidly weak emails begging candidates to call you. This just makes your franchise brand look desperate.

Call your Franchise Inquiries a lot.

More than you think you should.

There's one thing about your Franchise Inquiry that's true and you know for certain.

They clicked a button expressing interest in your franchise investment.

It's all you have to go on and it gives you sufficient confidence to follow up.

It's also best to get out of your head that you are being a nuisance since you have the information Franchise Inquiries want.

They asked you to call.


Here's how I recommend you ramp up your Franchise Inquiry follow up calls.

  • Use a CRM program and time stamp all your follow up calls.
  • Have killer voicemail scripts
  • Call Franchise Inquiries everyday for the first ten business days
  • Leave voicemails for every other call
  • After two weeks schedule a call a week

Franchise-Info helps franchisors with lead generation programs and strategies.

If this sounds llike your franchising story & you want some help solving your problems call me at 443.502.2636 [email protected]. Lease the talents of 20+ year proven franchise executive, who has seen and solved these problems before.

You decided to become a newly minted franchisor.

And when that day finally arrived how exciting was that?

You were going to conquer the world with your franchise brand.

Here's what you did right.

Started with a tested business model with a verifiable proof of concept.

Hired a competent and experienced franchise attorney to develop your franchise agreement and franchise disclosure document - FDD.

Your franchise attorney strongly suggested (or insisted) since you have a strong proof of concept for your franchise model that you include an Item 19 Financial Performance Representation - FPR and you did it.

Developed an operations manual, training system and support system that is scalable as you grow your franchise system.

You had a reasonable budget to market for franchise recruitment.

But, after a while, you will hate being a franchisor. Here are your 7 biggest beefs.

  1. Early franchisees you selected seemed very passionate about being franchise owner/operators but they are not living up to what they promised and you're more than disappointed.
  2. Multi-unit franchisees are not current with their development objectives and they expect you to not hold them to what everyone agreed to. They want some or all of the following extensions, refunds or credits against franchise fees and in return you get nothing. Not even what you originally bargained for.
  3. You have a great training program and franchisees are shortcutting what your program offers and requires.
  4. Franchisee local market success depends on local store marketing, your franchisees don't make the investment in it. And they complain to you that sales are too low and your brand is not well known enough in their area.
  5. Franchise owners expect you to fix their unit level problems with employees, landlords, suppliers, insurance, local municipality, their business & operating partners. You had no idea that you'd be expected to do so much hand holding and babysitting when you set out selling & opening franchises.
  6. Franchise recruitment for a new franchisor is tough. However you couldn't have imagined how difficult generating and managing leads would be. And the cost per new franchise recruited is far more than you anticipated.
  7. You discovered that your management team had a much greater learning curve for transitioning your business to a franchise development and operations company. And now you're faced with some tough staffing decisions as you move forward.

This is not an exhaustive list of awful franchise things and readers can feel free to add to the list.

Good news is that you had a good underlying business at the outset. And all these franchising challenges can be remedied.

If this sounds llike your franchising story & you want some help solving your problems call me at 443.502.2636 [email protected]. Lease the talents of 20+ year proven franchise executive, who has seen and solved these problems before.

It's pretty clear that franchise brand blogging is an effective way to communicate to probable franchise buyers.

How do you begin?

Start with a clear vision of why you are writing articles and for whom.

You want your probable franchise buyers to see how your franchise investment does these things -

  • Fits into their life
  • Helps them solve their problem
  • Gives them something to achieve and be proud of
  • Gets them to see themselves as your franchise brand owners

Your brand writing is all about what resonates with your probable franchise buyer.

Here are your 3 essential franchise writing topics and one thing you should stop doing -

  1. Why your franchise brand came into existence. Every brand has an origin and stories to tell.Think of these as chapters in your franchise brand's book.
  2. Tell stories about your franchise owners. How they see the franchise brand. How they got started.
  3. Talk about your industry. How your brand competes. Does things in interesting and novel ways. Solves your customers' problems
  4. Stop putting out boring run of the mill press releases that don't get you anywhere

Have reasonable and achievable franchise article writing objectives.

This is important and easier than you think.

Choose to write 2 articles a month as a realistic goal.

Here's the easy and good part.

As you add new articles most of them are evergreen and they become part of your brand archive and you can use them again and again.

These articles no matter how often you distribute them they will always be 'new' to new probable franchise buyers and that's the 'for whom' you are writing to.

The best to way to begin this is to start.

And when you do and you want Franchise-Info to look your article over email it to me at [email protected] 443.502.2636 and I'll tell you what we think.

Get your franchise stories placed and read - 90 Day LinkedIn Content Marketing & PR Program

Franchise selling is competitive.

People have a lot more franchises to choose from than ever before and there are only so many franchise buyers.

If you have any of these 5 franchise selling problems you need to do something about them.

  1. Not enough of your franchise leads answer your calls and emails.
  2. When you do get leads to talk with you it feels like a "Cold Call" and many times they don't know you or your brand.
  3. You discuss your financial standards with leads and they are shocked at the cost.
  4. After having great conversations with leads they say they will send you their franchise application. And they don't do it.
  5. Once you send your Franchise Disclosure Document - FDD to a lead you think is interested and qualified. They stop talking with you.

And you can take steps to solve all of these problems.

The first thing you should avoid concluding is that your leads are no good.

If I only had a dollar for everytime a Director of Franchise Sales said that to me. It's just too easy to say.

And you don't know if it's true. You do know your franchise selling isn't working out as well as you would like.

You need to take all those inactive leads of yours and do something new with them. You need to nurture them.

Put them on nurturing newsletter program.

It is not a 'buy my franchise" email.

It is not a drip campaign that will bore people to tears or annoy them.

Your newsletter program must be informational. And it has to offer assistance that helps your probable franchise buyer solve their problem.

You can try this yourself.

Or use Franchise-Info's Newsletter Nurturing Program for as little as $350 per month.

Now that you have taken an important step to get your leads active in your franchising process let's talk about that process.

Here's what you need to look at -

  1. Do you have the right sequence of steps?
  2. Are each of your steps structured properly?
  3. Where in your franchising process are people dropping out?

What to do about your leads -

  1. Fix your franchise sales process before you attempt this.
  2. Add your nurturing newsletter.
  3. Measure each lead source for -
    • Inquiries
    • Qualified leads
    • Applications
    • Sales
  4. Reallocate your franchise recruitment advertising and marketing spending.
  5. Keep measuring lead sources every 6 months.

If you have limited internal resources or you just want a set of experienced eyes on this with you just give me a call 443.502.2636 [email protected].

Growing your brand through franchising is a demanding and exacting proposition.

You need to mindful of all the franchising rules, regulations and administration requirements.  

And you have to have a great plan with a talented franchise sales leader working the program.

Here are 3 huge errors CEOs make when hiring a VP of Franchise Sales -

  1. You expect the VP of Franchise Sales to rely on their rolodex for leads. Assuming that could work. What do you do after they run through their contacts. Were you hiring a franchise sales professional or hiring their rolodex?
  2. You want to sell multi-unit deals to established and proven operators and you think all your VP of Franchise Sales needs to do is cold-call multi-unit franchise owners and sell them on your concept. You can't explain to anyone how this works. And there isn't anymore to this plan than an executive order to smile and dial. Here's what happens. Your VP of Franchise Sales will do it and give up or pretend to do it and tell you he is. In either case this won't work.
  3. You will pay a market rate for an experienced VP of Sales. But invest little to no money in franchise recruitment marketing to reach potential franchise operators. Instead you'll rely on VP of Marketing's consumer marketing to build interest in the brand's franchise offering. Despite the fact the consumer messaging is about your products and franchise sales messaging is about the franchise investment. 

Now if you made any or all of these mistakes it's not too late to right the ship.

They will require some concentrated effort on your part and thoughtful collaboration with your VP of Franchise Sales.

Get over item number 1 and then take items 2 and 3 one by one and fix them.

If you need help with righting your franchising program give me a call at 443.502.2636 and we can work on this together. 

Here's a conversation I've had more than once with clients and CEOs of franchising companies. It's about upfront franchise fees.

The conversation typically starts with the C-level executive saying: "We make our real money on royalties & not on franchise fees."

And I oblige them with a quizzical response of: "Wow how does that work or what do you mean?"

I then hear something on the order of well, if we had 50 (or pick a number) highly qualified franchise candidates a year, we would give the franchise fee away to them in favor of making all that royalty revenue.

And on its face this sounds logical and even attractive. What franchisor wouldn't want to do this? They could even have the CFO dream up a great Excel spreadsheet showing obscene profits from royalties to convince the board of directors that this is a good idea.

Here's the reality.

Unless you are a franchisor with an unlimited and inexhaustible supply of qualified candidates you don't have 50 great prospective franchisees to give away your franchise fee to.

I almost always ask the franchising executive - okay do you have 50?

And of course you already know the answer to that question!

So, I ask them: "How much would you pay for that list?  How would you finance it?  Maybe ... with franchise fees?"


Even McDonald's who does have a waiting list for franchises charges a franchise fee.

Here's my list of what you need your franchise fee to cover.

  1. Franchise salespeople are assets and you need franchise fee revenue to pay for the best.
  2. A great franchise sales, recruitment and selection process requires resources to ensure you get the results you want.
  3. Having a low fee or no franchise fee won't sell more of your franchises and it may sell less.
  4. Great franchise owners are recruited. You need a budget to market to your target audience of potential franchise investors.
  5. Franchise buyers look at the total development cost and do their own calculation of return on investment. And if your franchise fee doesn't support an attractve franchise investment you don't have a franchise fee problem. You have a unit economics problem.

If you need help looking at your franchise fee structure and competitiveness call me at 443.502.2636 - [email protected].

I remember the time I got a call from a hot prospect in a market we were targeting.

We'll call him Charlie since that happens to be his first name.

Charlie really sounded like he knew what he was doing.

But, I'd only been selling franchises for about 14 months. I was greener than green.

As a potential franchise buyer Charlie asked great questions like:

How much does it cost to develop this franchise?

What are the real estate and site requirements?

How long did it take to build the franchise?

I answered all his questions respectfully and carefully.

And then I took the opportunity to ask him some qualifying questions.

I wanted to know if he met or exceeded out financial requirements.

Charlie surprisingly answered that his net worth was about $5 million with 80% in real estate and he had cash or cash equivalents of about $1 million.

Now Charlie already had me excited with his questions at the outset! And now he had told me his financial profile which exceeded our requirements.

Charlie was my kind of guy and we were having such a great call.

It was now time to get Charlie approved. Send him a NextDay UPS franchise information packet with an application and instructions on how to fill it out (back in early 1990s that's how you did it).

Charlie said that would be terrific!

At this point Charlie and I were like family. 

And then Charlie said to me -

"You know Joe I've got this piece of land that I think will make a great QSR restaurant site and I'd like to build one of yours on it. Do you think you could have one of your real estate guys come take a look at it before we go any further? I'd really appreciate that, Joe. You'd be doing me a big favor and we'd both be moving this process along faster."

Now I had a dilemma we didn't pre-approve sites before a franchise candidate had been approved to be a franchisee.

But Charlie was perfect and so easy to talk to. I told Charlie I'd have to check and get back with him the next day.

Then I looked at the Director of Real Estate's schedule and saw that he could be in that market next week if he stayed out in the field another day. My real estate guy said he'd do it if I thought that Charlie was that good of a candidate.

I called Charlie back the next day with the good news. And he thought it was fantastic that we would break with our franchise sales process for him.

Well the week goes by and the Director of Real Estate is back in the office with good news that from a preliminary look at the market, demographics and competition the site was acceptable.

I was delighted!

So, I phoned Charlie back with the good news about his location --and now it was time to get his application in to us and get him approved. Charlie said would get right on it and that I'd have it faxed in within 3- 5 days.

After to waiting the 5 days and one more day for good measure I called up Charlie to check on the status of his application. No answer so I left a voice message. I thought for sure that I'd get a returned call straightaway from Charlie.

But I didn't.

I dutifully called Charlie for the next 4 weeks until one evening late in the office I gave Charlie a call and he picked up. Charlie apologized for not getting back to me sooner but assured me that he'd like to see one of our restaurants on his piece of land.

I said okay when do you think you could get you franchise application in?

And then Charlie said -

"About the application, I've been talking to my real estate guy here in town and he says that some of your big competitors have been sniffing around at sites around town including mine. I was thinking Joe that I might be better off as a landlord on this location and I'm wondering if you've got any franchisees who like to be in our town or maybe you'd want to put one of your company units in here".

I asked Charlie just to be clear you no longer want to be a franchisee? His answer as you would expect at this point in the  in the story was a resounding No.

I'd been duped. As you might suspect Charlie was never interested in being our franchisee. He was selling a real estate deal. And I was providing the validation and possibly the tenant.

We never did a deal with Charlie.

And my very experienced Director of Real Estate would in a nice way ask me from time to time how I was doing with my Uncle Charlie.

Need more experienced tips on How to Sell a Franchise?  Sign-up for the weekly newsletter.

Franchise selling is about effective qualified lead generation and a franchise sales & recruitment process that works. Getting these two things right goes a long ways to winning you more franchise deals.

Franchise buyers usually don't enter your franchising process with their minds made up that your franchise concept is the one they will buy. And if they do they don't typically tell you that they are ready to buy. 

They might not want you to 'sell' them on your franchise. However they do want to be 'sold' on the idea of owning your franchise concept. They have to see themselves owning it and visualize doing what it takes to be successful.

Franchise sales processes from a franchise seller's perspective probably seem longer than they need to be. You likely have around a sixty day timeline plus or minus in your process.

However it's important to remember that franchise buyers need to go through a series of mental operations before they conclude it's time to commit, sign a franchise agreement and pay the franchise fee. 

 Franchise buyers buy on their schedule not yours.

There are techniques and tactics you can incorporate into your franchise sales and recruitment process to improve. Many require a certain amount of careful consideration and planning. 

I am going to focus on just one technique that you can implement right now, today without any delay. And it will change your franchising efforts dramatically.

Most franchise sales and recruitment processes have 6 or 7 steps from inquiry to franchise sale. Franchise buyers drop out of the process at different steps and it's the franchise seller's job to keep them engaged and advancing.

Here's what you do faithfully before the conclusion of the step you're on with each and every candidate. You schedule the next event in your process while you have them on the phone or across the table from you.  

Franchise sellers are the calendar keepers for franchise buyers.  

So pick a mutually reasonable time to schedule the next event with your franchise buyer. If they hedge on it you know you have a problem and you need to look into it right then and there. 

 If it's just a scheduling issue that's easy. Tell your candidate that's okay we'll put this on our respective calendars and if we need to change it we can.

This seems really easy to do. It's not.

I found the better the meeting I had with a candidate the more likely I was to forget to schedule or think it was not necessary to use this sales tactic. 

 Build the discipline to do this simple straightforward task every time and you'll get more & faster franchise sales without rushing your franchise buyers.

When you start your own independent (non-franchised) business, your mistakes will be more costly than you imagined. In fact, your mistakes will probably put you out of business.

I'm not writing this to scare you away from starting a business without a franchisor; I'm writing it because it's factual . . . and scary.

Do indie businesses survive?

Have you looked at the statistics? How many independent start-up businesses survive in the USA? Rather than take my word for it do some research, or better yet, just ask a local business banker!

Of course, the more entrepreneurial you are, the more likely you are to say that you can avoid the mistakes, and maybe you can. However, the statistics say otherwise. Most independent startups fail.

Why mistakes occur

Many people think certain businesses are easy to start and operate. Let's take pizza for example. Many people can make a "good" pizza? My Italian grandmother made the greatest pizza in the world, so it's no surprise that many of my cousins can make great pizzas, too.

In fact, when people tasted my cousin Mary's pizza, they told her that she needed to go into business. And she did! Mary and her entrepreneurial husband (also an Italian) opened a couple of pizza shops, and in a matter of years were dead broke.

How could that be? They made a "great" pizza.

Can you sell what you make?

I'll tell you how. They knew how to make pizza; they didn't know how to market and sell pizza. Franchising's saving grace is that it knows how to distribute (sell) products and services.

It is simple to open a pizza shop. You get a good location, buy the equipment, bring in the supplies, get a recipe, put up a sign, do some marketing and . . . voila! . . . you've got a thriving business.

No, you don't. You've got a money-sucking business, unless you avoid the mistakes.

What do customers want?

1. Mary's first mistake was believing that consumers want a "great" or even "good" pizza. They don't. Just look at what they buy everyday!

2. Mary thought she could build her business by advertising in the newspaper. Wrong. The pizza franchises would have saved her from that mistake.

3. Mary also thought she could build her business without delivery. Wrong. The pizza franchises would have saved her from that mistake, too.

Too many mistakes

There were numerous other mistakes . . . Mary didn't know how many slices of pepperoni to place on a large pizza and still keep it profitable . . . and the pizza franchises would have saved her from that mistake as well.

After so many mistakes, Mary and her husband lost their business and much more.

It's easy to make these mistakes . . . Mary and her husband had no idea they were making them. They would have done anything to avoid them . . . except buy a franchise. Because a franchise would not have allowed Mary to sell her "great" pizza.

Should you buy a franchise?

Look, you need to make some tough decisions before you start a business. What's important to you? Your way? Or a franchisor's way? Keep in mind that the franchisor may not sell what you consider to be a "great" or even "good" product - if that's important, find another franchisor, or avoid franchising.

Of this you can be sure: If you buy a reputable franchise (and they're not all reputable) the franchisor's training will save you from making too many costly mistakes. You're still going to make mistakes, but in a franchise, the mistakes probably won't put you out of business. Ask your banker how many of his or her franchisee clients fail? It's one of the reasons why bankers love franchising.

In fact, even though they won't tell you, the bankers know you are going to make mistakes when you start an independent business, and even though you've accounted for mistakes in your business plan and cash flow estimates, the bankers know better. Your mistakes are going to cost more than you think.

Franchisors need to have financial standards for their franchise candidates. In fact they are a 'must have' in your franchising sales and recruitment process.

And your franchise candidate financial requirements for net worth and liquid capital (cash or cash equivalents) should match up with the Item 7 Estimated Initial Investment in your Franchise Disclosure Document - FDD. And be bankable by meeting or exceeding bank lending requirements. 

Now I look at a lot franchise sales processes and a big area of opportunity to generate more franchise sales is your application. Most franchise salespeople don't think of their franchise application as a candidate attraction and sales tool. 

I think you should. And here's how.

You should use the 'Joe Friday Dragnet Approach" of "Just the Facts Ma'am". You want the 'bare essentials' at this stage and most franchise applications ask too many questions gathering information the franchisor and sales team will not ever use.

Let me ask you how many times do you look at the franchise candidates application after you have confirmed they meet or exceed your requirements?

Okay here's the quick fix list of do's and don'ts. 

  1. Do make it easy to fill out the application. Get it to 20 minutes or less.

  2. Don't ask for Social Security numbers at this stage. You don't need to.

  3. Do get the 'bare essentials' of net worth and available cash. You need to know they qualify.

  4. Don't let someone in the Finance or Accounting Departments control this part of the franchise sales process. You need to. Franchise sales is your thing.

  5. Do keep your franchise application to one page. You'll get points for this with candidates and more will apply.

Remember it's the financial wherewithal of the candidate that's important. And the trust you build at the beginning of the sales process. It's not about making people do more work than is necessary. You're not the Department of Motor Vehicles.

Have the right financial requirements for your concept. But make it easy & dead simple to apply.

We fix gaps on franchise sales processes. And if you need me to look over your franchise application process call me at 443.502.2636 or [email protected].

Most franchisors want to sell to multi-unit qualified area developers.

Companies write about it in their press releases and in their 10Ks that they plan to grow their brand with these supremely qualified multi-unit operators.

Multi-unit operators who have proven experience in multi-unit development and operations know they are attractive to franchisors.

So, they play hardball. 

One trick they use is to by-pass the franchise sales team altogether and only talk with your CEO.

So how do you prevent these sought after potential multi-unit franchise candidates from keeping you out of the loop?

  • Make a deal with your CEO to get those inquiring potential multi-unit franchisees into your process.
  • Have your CEO take the incoming calls from potential multi-unit franchisees.
  • Give your CEO a roadmap and scripts for these calls so they know the process you'll use to make this type of sale.
  • The CEO's single objective is to get the potential multi-unit franchisee back to you.
  • Once you have the potential multi-unit franchise candidate talking with you, take control of the sale. You take control by giving it up.

Let the the candidate tell you their - 

  • Franchising story.
  • Vision for their future. 
  • Process for adding franchise brands to their portfolio.

Convince them you're the person that can get their deal done for them.

Describe the business development path in a way that fits how they make a buying decision. 


Yes Qualify them -

  • Ask them who else you'll be working with on their team.
  • Make sure early on that the territories they want are available.
  • Find out how much capital they intend to dedicate to your franchise brand.
  • Move them through your franchise sales process.

Never treat them like first time franchise buyer.

More tips and tactics on successfully recruiting these prized qualified multi-unit operators - give me a call.  Or sign up for the Franchise Sales Tips newsletter.

If you haven't heard about The Franchise Registry it's important that you do, especially if you're thinking about applying for an SBA-approved loan to acquire a franchise opportunity. Approximately 1,000 franchise brands (which is maybe a third of the franchise companies in North America) appear on the registry. For brands that do not appear, you probably will not get your SBA loan approved.

Even if you don't plan on securing an SBA loan to buy a franchise, The Franchise Registry is a good way to check out a franchise opportunity.

Checking Out The Franchisor's Operations

Prior to guaranteeing a loan for a franchisee, the SBA wants to be familiar with the franchisor's operating procedures. With nearly 3,000 franchisors operating in the USA, and changes occurring randomly to their operating procedures, it's a chore for the SBA to review all of those companies.

Some years ago, the SBA contracted with FRANdata, a company that provides objective information about franchising, to maintain the registry, conduct the ongoing reviews, and negotiate, as needed, with franchisors to help them comply with SBA's regulations. To be considered for the registry, franchisors pay $2,500. Some companies may balk at that, or simply not have the funds. However, it's a small price to pay to gain access to prospective buyers who need SBA funding.

Benefits Of The Franchise Registry

According to Darrell Johnson, president of FRANdata, the registry provides several benefits:

  • It "comforts" lenders. The registry provides a risk-reducing factor to lenders and saves them time. If a franchisor appears on the list, the lender knows that the franchisor's documents have met the SBA's standards.
  • It's a marketing tool for franchisors. The franchisors that appear on the registry can tell their prospective franchisees that their documents comply with SBA's lending criteria.
  • It "comforts" prospective franchisees. When a franchisor appears on the list, it tells the prospective franchisee that the franchisor's franchise agreement isn't onerous. The SBA has reviewed the document and it's acceptable.

Is Your Franchisor Registered?

Take a moment to review the registry to find out which franchisors are listed. If you're considering a franchise that's not listed on the registry, and you know that you'll need an SBA loan to become a franchisee, your first step should be to tell the franchisor to get on the list. If you're not seeking an SBA loan, but your franchise opportunity of choice is not on the list, ask why!

Fred; I have been pitched over the past 25 years in franchising all manner of snake oil for "profiling" and many have said that they can measure top performers and we could use the model to recruit high caliber and similar franchisees and employees. 

What do you say to a franchisor who wants a reliable predictive performance tool, other than buy yours? 

How should they approach it practical manner?  What should they expect from using such a tool?

fred berni1.jpgJoe - Let's start with the 5 basics of all good design.

1. Predict Performance:

Make sure that whatever system you're considering was actually designed to predict performance for the job, in this case, owning a franchise.

2. Designed for Selection or Recruitment

Make sure the system under consideration was designed for selection. Several of the most common personality profiles specifically state on their websites that they were not designed for selection.

One even goes so far as to say it's unethical to use it for selection. Even so, people are out selling these profiles for selection purposes.

3. Don't Discriminate in an unreasonable manner.

Third, make sure that the system you're considering does not discriminate. Even unintentionally. See Griggs v. Duke Power Co. A good summary is at

4.  Verify Performance Carefully, using an Independent 3rd Party.

Unfortunately, there's no simple way to run an analysis between performance and "profile scores". No matter what you're told.

There's a fair amount of complexity involved in comparing scores and actual performance.

And by performance, I don't mean simply a gut feeling of they're good or bad.

That's subjective criteria because the ratings can change depending on who's doing the rating and their relationship to the franchisee. That's not to say you can't use subjective data, just that if it's available, use objective data with subjective thrown in.

Objective data is something to which you can relate to hard numbers.

Things like actual $ sales per location, % increase one year over the next etc. I've even had clients in auto repair use $ sales per bay.

It all works as long as you can put a hard number on it. Then you have to use rigorous scientific methods to analyse the relationships between "profile" scores and performance. Hopefully this analysis is done by a 3rd party with no stake in how the results turn out.

5.  Include Everyone and Increase Sample Size.

You'll need to include good, bad and average performers.

Here's an example of what I mean: Let's assume you've just made a movie and want to project what your ticket sales will likely be.

If you only include good reviews you could say that 100% of the people that saw the movie like it.

True, but not accurate. Only by adding the bad and average do you get an accurate idea.

In the same scenario, how many people would you need to ask before you are comfortable with a projection? Five? Ten? Twenty-five? One hundred?

Generally accepted sample sizes are a minimum of 100 before you can accurately predict performance. Anything less than that and the best you could do would be to assume you've identified a possible trend.

As far a reliability is concerned, my definition is to be able to say with 95+% confidence that the there's a definite causal relationship between performance and profile scores.

With larger sample sizes, our confidence level could be 99.5% or even higher.

Having said that, it really boils down to what you're willing to accept as being reliable. Being able to predict accurately 50% of the time? 75%? 95%? What's your comfort level?

The bottom line is that it's simply not appropriate, accurate or legally defensible to just pick your  1. or 20 franchisees and base your decisions on that small a sample. Even if you include poor performers in the mix.

Having said that, if the system you're considering was developed to predict performance of franchisees in similar type of franchises, and can provide you with documentation of such, in all likelihood you'd be safe just going with the "template" already designed by the developer of the system.

Hope that answers your question Joe. Did I miss anything?

Smart and savvy franchise buyers almost always ask for your Franchise Disclosure Document - FDD at the outset when they contact their target franchisors. 

Or they get the FDD from another source before inquiring directly to a franchisor.

franchise ABC.jpg

There are 23 Items in the FDD. 

The franchise buyer initially is looking at Item 7 Estimated Initial Investment and Item 19 Financial Performance Representation - FPR of the franchise concepts they are vetting.

Item 7 Estimated Initial Investment gives the prospective franchise buyer a high & low range for the investment.

Item 19 FPRs or what prior to 2008 was called an Earnings Claim provides franchise concept financial performance information.

The franchisor must have a reasonable basis for their Item 19 FPR.

Item 19 FPRs come in a variety of formats and level of financial detail can range from a minimal gross sales representation to full blown profit and loss statements.

Great franchise buyers use the Items 7 and 19 combination to develop a basic return on invested cash - ROIC calculation. 

This preliminary ROIC calculation helps rule in and rule out franchise concepts for further consideration.

  • Franchise concepts with Item 19 FPRs insufficient to estimate cash flow are ruled out.

  • ROIC calculations within the range of 3 to 5 years franchise investment payback are ruled in.

There are over 3000 franchises offered for sale in the United States. 

Only 40% or less of franchisors include the optional Item 19 FPR in their FDD. 

And the as competition increases in franchising more franchisors are including an Item 19 FPR or improving the quality and depth of financial disclosure they provide

Smart and savvy franchise buyers see little reason to spend time on potential franchise investments with franchisors who cannot or will not provide financial performance evidence proving that their franchise is investment grade.

If you are a franchisor without an Item 19, you are at a real competitive disadvantage.

So, give me a call to chat how we can help you with your Item 19.

Print leads were different from internet leads.

It used to be that a print lead would phone you after seeing your print ad.

While on the phone with the prospective purchaser, you had to qualify them financially.  

You also had to separate pretenders from the contenders.  In restaurant franchising, the pretenders would often want to know if we would come and "look at their site".  "Well, not until we are in the site selection phase - which happens after you sign the franchise agreement."



Prospects were easier to qualify because they phoned you.

But over the last ten or eleven years, internet leads have replaced print leads.

Qualifying leads has grown exponentially harder for two reasons:


1.  There many more internet leads.

2.  It is very hard to get the internet lead on the phone.

I have spent many years reviewing a franchise sales programs - from the time when all the leads were print to now, when most of the leads are digital.

I have always found the same thing.  

Leads can be sorted or segmented into three groups: Cannot Buy, Ready to Buy & Not Ready to Buy, Yet.

Internet leads are much harder to segment because it takes so much time to get in contact with the lead.

We have developed some ad hoc systems to handle this problem, but we weren't really happy with this solutions performed.  

For example, telephone verification was either too costly or they did not sort the groups properly.

Early in 2013, we started experimenting with an entirely new system - one that relied upon some sophisticated autoresponder rules.  

We can classify a lead into: cannot buy, ready to buy, or not ready to buy, yet based on how the lead would respond to our messaging sequence.  

Best of all, it was a great combination of human verification & autoresponder technology.

Franchise Info Lead Filter Qualifier.png

We are confident that we can help you sort out your franchise lead problems.

So, give me a call to chat about your franchise lead problems.

Call Me at: 443-502-2636 

Click here to email me, Joe Caruso.

Nobody with any common sense will believe that having a tattoo helps you manage your franchise owners.

It is a silly idea.

But, here is what is not silly:

Asking your franchise owners to get a "tattoo".

What are they willing to commit to?

Here is Barry Nalebuff giving a great example of a commitment device- Get a Tattoo, for me.

For the 5 Most Fascinating Stories in Franchising, a weekly report, click here & sign up.

The Franchise sales process has changed since I began over 20 years ago.

Back when I started out, people interested in franchises used the telephone to inquire and request information.

Because they saw our ads in the Wall Street Journal or some other important franchising magazine. 

We talked to them and sent our info packets out through the mail or UPS NextDay.  The sales process had begun.

But, today franchisors are building costly & elaborate franchise recruitment websites.

  • They give probable purchasers glossy franchise brochure PDF downloads.

  • They use higher-powered full-blown & expensive CRMs to move the probable purchasers through to a sale.

Yet, here's the biggest complaint I hear today from franchisors.

Their sales teams can't get people on the telephone. The leads will not call them back -or the phone number was fake.

Now that is a big problem. 

You cannot sell franchise to someone who won't answer their phone or call you.  

Why aren't they returning your calls?

You built a wonderful franchise "information platform". These probable purchasers have all the research they need.  Don't they?

But, they still won't return your call.

Do you know why?

The probable purchaser feels as though he doesn't need to talk to your franchise sales team members.  You have provided all the information.

You had the best of intentions. You wanted to make it easy for their sales team to sell franchises.  It is disappointing to spend all this money.

I know what the problem is & I can fix it.

Because I have been doing franchise sales development for a very long time.

And Mike Webster knows a thing or two about how people really make  big ticket franchise investment decisions.

So, when you need a combination of great practical skill and wonderful science - which no other franchise developer group can give you- give us call and we will fix your sales process for you.

Franchisors need to grow!  What better way to grow than to sign multi-unit development agreements.

How do you find multi-unit operators to create growth in your franchise system? Well, you have to recruit for growth by matching talent and capital.

Some franchisors recruit established existing franchisees of their own brands who possess the operational expertise, development know-how, and who are also well-funded.

Dunkin Donuts just used this strategy in California: "Dunkin' Donuts, America's all-day, everyday stop for coffee and baked goods, and one of the fastest-growing quick service restaurant (QSR) brands based on unit growth, announced the signing of a multi-store development agreement with existing franchisees, Harry Patel and Parag Patel, to develop 18 new standalone restaurants in North Orange County and the Central Inland Empire."

Dunkin Donuts likely have a great feel for what the Patels can achieve.

But, what about recruiting multi-unit operators from other brands? 

Three Myths about Multi-Unit Operators Expansion

First, there is the standard or run-of-the-mill franchisor expansion myth:

Just go and find the multi-unit & multi-brand operators, sign them up for your concept and watch the development territories build out as new units come on-line.  

Like clockwork.

The franchisor only has to collect the upfront area development agreement fees, the unit franchisee fees, and the expected the windfall of royalties and advertising fund contributions.

Don't let the multi-unit operators fool you into believing this myth. Brand expansion doesn't happen that way.

Second, when you talk to those multi-unit operators you'll be told straight away they won't need all the hand holding, training, and guidance that those attention stealing needy newbie first-timer franchisees demand. Those experienced operators will manage themselves! You will likely be told that you could learn a thing or two from these highly experienced operators.

Again, the reality is different.

The reality is that many development agreements are not strictly complied with, according to the terms the agreement.

Searching the SEC corporate filings from publicly traded franchise companies you can find that many area development agreements are in default, technical default, terminated, or re-negotiated.  

You may need to review the historical Franchise Disclosure Documents, FDDs, which may be harder to access.

The third myth is that experienced multi-unit operators are easier to manage.  There are four reasons why this may not be true, either.

1. Multi-unit operators are further away from the day-to-day operations. They may require or even demand more training and support from the franchisor.

2. Multi-unit operators may challenge your training, support delivery systems, or standards.

3. They may have different ideas on site selection criteria and who has final say on site approval -despite what the agreement states.

4.  A seasoned multi-unit operator may change your concept, menu, build-out, equipment package and they may not ask your permission.  Again, despite what the agreement states.

So,  recruiting mult-unit operators from other brands does require a bit more due diligence.  Here are four tips to get you on your way.

1. Access to Capital: Do they have access to capital to build out the development schedule for your new concept?

Many multi-unit operators look more profitable than they are.  Their development schedule may have been drafted in a moment of enthusiasm.  Their capital maybe entirely locked-up in their current brands.  

Don't automatically assume that a 40 unit operator has sufficient capital or access to capital to commit to your project.  

Don't fall into the trap of getting excited about signing up a large multi-unit operator for your brand, unless they show you the money.

2. Other Development Obligations: What are their development obligations, including remodel commitments, to their other concepts?

Just knowing that they have the money isn't enough.  You need to know about their development obligations to their current brands.   You have to pay to attention to their remodel commitments.  Much of their capital may already be spoken for.

Can they build the stores and remodel the units that they are already committed to without exhausting their capital?  Is the multi-unit operator meeting its current lender obligations and staying within their loan covenants?

3. Compliance with Schedule: Are they in compliance with the schedule in their current development agreement(s)?

The mulit-unit operator may have sufficient capital to expand your franchise system.  But, are they dragging their feet in their current development agreement?  

Development schedules can be slowed if operating revenue has been reduced.  Beware of the multi-unit operator who uses a slow development tactic to extract territorial concessions from you mid-deal.

4. Compliance with Operations: Are they in operational compliance under their current franchise agreements?

Not all multi-unit operators are actually great operators - despite what they would claim!  Don't be fooled by a multi-unit operator who is merely tolerated in the system because they own great locations or control the underlying real estate.  

Check to make sure that they are exceeding the franchisor's standards.


Franchisors need to grow. And you should recruit from established existing franchisees of other brands. But they need to possess the operational expertise, development know-how and be well-funded.

In this video, Richard Leveille, the Executive VP of Franchise Development & Real Estate for Smoothie King, shares how the Buxton model uncovers:

Who Smoothie King guests are;

What life segments they fit in to, and;

Know how to put stores around them.

Today, Smoothie King has about 520 domestic stores and a little over a hundred international stores. Leveille's primary focus is on the development and the real estate side of business.

Leveille needs to ensure that the franchisee puts its store in the right trade area and the right physical location in that trade area.

For retailers and restaurant chains, there is certain limited data that is really available to help us make the right decisions.

SmoothieKing the ability to really analyze what's in the hearts and minds of the consumers in the area. Leveille can analyze hundreds of locations anytime, day or night.

Leveille admits that prior to Buxton, Smoothie King didn't really know who its guests were, their buying habits or what they liked.

But, after utilizing lifestyle segmentation, the company now knows which segments fit its customer base and which ones, on a priority scale, spend more money in stores. This information helps determine where to put Smoothie King stores and what trade areas to focus on.

According to Leveille, the most exciting thing about Buxton is that the people really understand what Smoothie King is looking for.

He now feels confident that Buxton had the tools, databases, delivery systems and SCOUT management system to provide what he needed to make a difference in the company.

Follow Us

About this Archive

This page is an archive of recent entries in the Development category.

Find recent content on the main index or look in the archives to find all content.