- 30 Jun
Six simple steps that will grant your franchise a successful sale - Step 3
STEP 3: FRANCHISE DISCLOSURE REVIEW
Stage objective : Determine business skill ability of your candidate in developing your business as well as Discovery Day pre-sale
There are six simple steps that will grant your franchise a successful sale. They start with a simple preparation until your business unit is ready for profit generation. The third stage which we are going to discuss at this post speaks about franchise disclosure review.
Before you can start your own franchise unit, it is mandatory by the law to follow specific business regulations. Some places name this regulation as Franchise Disclosure Document, such as in USA and Dubai. Your local government may recognize it with a different name. So, make sure you have known the document name before you start franchising your business.
FDD contains not only requirements you should fulfill before starting a franchise, but also information about relationship between your company and local government, your employees, your customers, and especially your client. At this precise moment, without disregarding other sides, we will begin our discussion with your franchise clients and their relationship with the legal document.
Most franchise experts believe that it would be good for you if you ask for your client’s opinion about the legal document. So, both your prospective clients and you can have the same perspective of all contents of the legal document in the future. Well, for this reason, not only you should expect about opinion, but also questions and another appropriate input. To meet the objective of this preliminary action, you should accompany yourself with the document itself. It is a helpful resource you need to provide a proper answer to your client’s question. So they receive accurate answers for each question they give to you. There are some cases, however, when franchisor cannot provide the appropriate answer or even fact about one or two questions. If you face this condition, do not hesitate to ask additional time from your client. By doing that, you will prove to your client that you base your work on honesty, not just lie and money. Now, after this discussion part ends, give it a conclusion by asking your client a question similar to the following question.
“Now, after discussing this FDD, I think that you have understood what it tells about. Do you feel comfortable about the content, especially about how our franchise unit works?”
Even though some people claim it as the simplest and most convenient way in doing business, both your client and you should know one appropriate thing regarding franchise business. Sometimes, it does not fit either with you, your client, or even both of you. So, just remember to make sure that your client has completely agreed about this point. If you see the contrary, you are free to disqualifying or eliminate the candidate. You will only face a constant battle if you insist on taking unqualified candidate into your system.
Please note that in some franchise discussion cases you may hear an individual request from your client. They may ask your permission in asking legal counsel in reviewing the disclosure document. I strongly urge you to accept subject of this invitation, but remember to mention them about hiring a franchise attorney to do the job. It is the best, yet safest option that will save their money, as well as their valuable time. In fact, franchise attorney gives better analysis than a general attorney. As long as you can get the best, why you should expect ordinary service? General attorney may offer you cheaper service cost than franchise attorney, but do remember that their unspecific review over the document may lead your franchise business to a great suffer.
After both of you have completed the review stage, now you can turn both attention to your franchise prospect. Use some open-ended questions to probe this stage that main purpose is to dig further information about the business prospect as well as to show interest. In addition, open-ended questions allow you to provide a better guide to your client in investigating the possibility. The same questions will show you where exactly your client’s interests lie as well as their hot buttons. Do not waste your time in rambling about your offer. Do directly to the main subject. In a time, you should find precisely the key behind their decision-making as well as their preferences in judging an opportunity. Try to ask this question to your client, “I see that you had reviewed two other franchises. May I know some particular things you do not like from them, please?” Try to become a close friend of your client with whom he/she will tell everything, especially about what he/she wants and thinks. This way they will appreciate your care and interest which many franchises do not have.
Now, you have come at the perfect time where you can start building the value of the precious Discovery Day visit of your franchise unit. You should also remember to put an excellent experience your client will have once they have arrived at the spot. However, please mention your candidates that there are at least two important points they should know before they can join the program.
1. Interview with at least three franchisor is mandatory
2. Preliminary franchise financing pre-approval is also necessary before they can get funding for their business
In accordance with both points, you can provide a contact list for your client to call as well as some sources whom you believe will help them with a cause.
Discovery Day is a perfect moment start-up franchisors should use as an ultimate promotion of their business concept, extraordinary benefits in joining their system early, and other similar benefits.
Give expectations to your candidates that you have set before and guide them before they make any call to their franchisee. Some tips from the main corporation about how to make a successful interview will also give them great benefit in this case. Well, you still have freedom for not giving this valuable help. However, do remember that once you decided to do the contrary, not only you will hurt yourself, but also your prospects who only have little knowledge about franchise, but great willingness to learn about it. In this case, before they can jump to a wrong decision, you should provide them with knowledge and another relevant guidance.
A business conversation is entirely different with ordinary conversation we have with other people. In this analysis, the future of business becomes the bid that becomes the reason we should put every effort we have onto it. Your prospects should also have the same perspective about yours in this case. However, most cases show that prospects often do not have any idea about issues they should address in the study. The responsibility lies at your hand in providing some helpful suggestions to them, even though you are not responsible in telling them everything they should know. There are some lessons they will learn better in the field rather than if you show directly to them. Here are some question samples you may need to tell your prospects:
• Please tell me your reason in choosing this franchise, instead of other businesses out there?
• Can you please describe your previous background related to this business?
• What do you think about your initial training?
• How is ongoing marketing and support?
• What will you do when you should deal with your competitors?
• Do you love this company? Why?
• Is there something you dislike from this franchise?
• How far have you meet your expectations from this franchise?
• You met with one or more people from our company previously. What do you think about their assistance? Is it enough for you to develop your own unit?
• Please tell me your own opinion about key success in this business?
• You are now a franchisor. What do you think about it? How good or bad your experience is?
• I will feel very happy to hear your opinion about our franchise.
With these questions, at least your buyer will have guidance in comparing, summarizing, and evaluating their discussions with their franchisees. Now, you only need to wait for couple days or a week before you should make a review call to your prospects.