5 Tips to Selling Your Services to Franchisees
The Franchise Doctor has found that many consultants, coaches, speakers, trainers, and other service companies totally ignore the potential available to them by serving franchisees. They assume that the franchisor provides for all the needs of each of their units. While a few do, most are unable to and the door is wide open to you–just like with any independent business in your community. Here are some insights in how to grow your company effectively in this niche of hundreds of thousands prospects.
1. Identify Ideal Niche Markets
Just like working any potential client list, you should look for niche markets that will be responsive to the services you provide. Are you good at teaching entry-level workers food prep techniques? Can you help improve advertising response for home services franchisees? Could you teach how to sell intangibles in a complex, multi-visit sale?
2. Research Franchisors That Are Likely Prospects For You
Do research in Entrepreneur Magazine (and .com), FranchiseGator.com, and Franchise.com to find franchise systems that offer products or services similar to those sold by your existing clients. When you’ve identified some, familiarize yourself with the system before you make your first appointment to present your offerings. Determine who could benefit most from your services. Do they know it? Are they using a competitor now or doing without?
You can do this by going to the franchisor’s website and finding a tab entitled “Franchise Opportunities” or “Own our Franchise.” Here the company will usually explain what types of training and support they give new franchisees. What do they promise franchisees in their marketing materials? Often this will address your niche or allow you to reach the conclusion that your skills may only be given a once over during headquarters training. If you promote new techniques in your industry, you may find that most franchisees have little understanding about how you can help them be more successful.
3. Determine Your Best Offerings
Based on your investigation of different franchise systems, review your list of service offerings and try to determine one or two that may have the most appeal. Recognizing that franchisees send a percentage of every sales dollar to the home office, you will find many are reluctant to spend money for services that they expect the franchisor to provide for them. The more progressive they are, the more they’ll see the logic of engaging you. We’d suggest you try to start with options that require a low initial investment, a minimum of the owner’s time, and provide results that can be measured–more leads, more customers, higher average order, lower turnover, fewer complaints, lower taxes, etc.
Arrange for an information-gathering meeting with a franchisee to determine what management challenges they’re encountering and how they are meeting them. Confirm that many of their peers have similar problems and ask what others are common in the system. Based on your findings, create a proposal on how you can help them.
Understand that most franchisors provide support in sales/delivery/maintenance/quality of the franchise system’s products or services. Most don’t spend much time teaching their franchisees how to run a more efficient business or build unit sales. They’re more focused on regional or national sales programs.
4. Gain Historic Data and Create a System to Measure Your Impact
It’s always wise to try to quantify what your services will do even if it’s teaching better hiring techniques, better staff training techniques, better manager/employee interaction, etc. It’s important to make it crystal clear how your services are going to improve the profitability of the franchisee’s operation.
After you’ve provided services to 1 or 2 franchisees in your market, you should request that they recommend you to the headquarters staff so that you can approach them about serving the needs of all franchisees. It may be wise to offer to attend headquarters new franchisee training sessions for one or two days to indoctrinate new franchises in your methods knowing that it’s easier to train them right than to break their bad habits after they’ve been open for a period of time. Some franchisors will resist this but will set you up to visit each new franchisee within their first month to perform your magic. That will require a lot more travel but it would probably increase your overall fee.
When you begin working with franchisees, always be taking their temperature to be sure that they will provide good validation to other franchisees. It’s very common to have franchises share vendors with others in the system and you want to be able to get endorsements both verbally and in writing as soon as you’re successful.
You should understand at that almost all franchisors have Operations Teams that regularly visit each franchisee. Depending on their niche, that may be once a year, once a quarter, once–or even twice a month. However, many of these people are there just to enforce compliance issues. In a food and beverage franchise, the operations team is going to spend far more time inspecting cleanliness, operating temperatures of the cooking equipment, and things of that nature than they are teaching sales and marketing techniques, hiring practices, training skills for the employees, sales tips for increasing orders, etc. If this is your focus you may find very receptive clients.
Most vendors dealing with franchise units agree that is best to approach one or two franchisees in your marketplace rather than going directly to the franchisor first. If you can prove to franchisees that you have brought valuable services to them at a competitive price you have a high potential of getting acceptance from the franchisor and then from many of the franchisees in the system. It’s critical that you determine where the problems are in the mind of the franchisee and how you may address those problems. It’s also critical that you get some ideas on how to quantify the issue so that you’ll be able to prove the improvements you made in the franchise. You’ll want to review the success of your training or system.
Many franchisees do not understand KPI’s (Key Performance Indicators) and you may have to spend your first visit explaining how these can help a franchisee measure his current status and clearly see trends as they develop. Help a franchisee search their data to give you input that will be useful in proving the positive impact you’re having in their business.
Before addressing a franchisee in your marketplace it would be wise to research how many units there are in your city and determine if you would have better success selling to the group or selling to individuals. You should also know how many units there are in the system nationwide and maybe even in the state or the greater metro-area that you service. Many franchise systems have co-ops for advertising and purchasing of food and other materials depending on their system. In this instance, the group of franchise owners in the city will get together to interview different vendors, select one and pool their money to purchase advertising promotion, brochures, seminars, etc. for the whole city. If training is your focus, you may find it best to get 6 or 10 franchisees to bring their people to a classroom. Maybe just the owners and their unit managers should attend.
5. Price Your Services Competitively
You should expect to give a discount or even a pro bono program to your first one or two franchisees in order to gain traction within the system. While this may not seem to fit in your marketing plan, if you typically close 1 out of 10 or 1/20 of your independent prospects, realize you will be closing a much higher percentage once you gain traction in a franchise system. Therefore, your marketing costs go down dramatically and a portion of this savings should be passed along to the franchisees in order to be competitive with other vendors and to prevent others from working in your space. If at all possible, try to price your services in relationship to some measure of success. Charge $X for each new lead you generate, etc.
* Work Wisely
Try to target franchise systems that have 50, 100 or more franchisees. Then, as your program is rolling out, you’ll see your revenues growing exponentially.