Franchise Update Magazine Issue II, 2013 - Page 59

“Most prospects have no idea what to expect. The more clarity you can give them, the more it takes the unknown out of the process for them.” and Consumer Reports. “I think it’s good for them to look at not just the business side—what franchisees are saying, and at costs—but also what consumers are saying about the brand. Looking at some of those third-party sources is an important step in their evaluation,” says Mellon. “We make sure we do a thorough due diligence process on our side, and we give them the tools to do the same thing.” At Papa Murphy’s, the entire process, from initial contact to signing, takes about 4 months. That is on the higher side of closing periods: 14.3 percent of respondents reported their process took 25 weeks or more, according to Franchise Update Media Group’s 2013 Annual Franchise Development Report. (See page 66 for AFDR data on average closing times.) Process, process, process Throughout the sales process, it’s critical to remember that franchise sales are different from other sales, says Mellon. Franchisees don’t make an immediate purchase decision, and the business model and regulations in franchising are different from what most people are used to. One of the most important factors in a successful franchise sales program, he says, is that the process is clearly defined, from the initial application to becoming a franchisee—and within that process, exactly what steps candidates will move through in the ensuing weeks and months. “If you think about a franchise sales person or someone who’s been in franchising a long time, it’s second nature to them,” he says. “You have to put yourself in the shoes of the new person looking at it.” During that first phone call from the in-house team, it’s critical to lay out the entire process. “Most prospects have no idea what to expect or what to do. The more clarity you can give them, the more it takes the unknown out of the process for them,” says Mellon. “For the first-time franchisee, it’s always great to over-clarify, so they know the big picture and next steps.” Grow Market Lead tions, financial capabilities, and laying out the next steps in the process. The team captures the prospect’s information in Salesforce and uses it to track and manage the process from start to finish. Including himself, Mellon’s department has 10 people: one responsible for lead generation and lead development, 2 sales people in house, and 6 more in the field. The internal sales people are responsible for the front and back end of the process, and the field team meets with the candidate in the next step. 2) Meeting face to face. If the prospect meets the brand’s initial qualifications, the in-house sales team sets up a face-to-face disclosure meeting for the candidate with one of the six field representatives the company has in the 38 states it operates in. “We want the process, as much as possible, to be face to face,” says Mellon. To speed the process and make it more personal, one of the field reps will travel to their market and meet with the candidate for an hour or two. “During the course of any given week, our field sales team will be out in those markets having those one-on-one meetings,” says Mellon. The disclosure meeting goes through the FDD, lays out the rest of the evaluation process, the timing, and explores expectations on both sides. If the disclosure meeting shows promise, the candidate leaves with a business plan template, a list of franchisees, and a set of disclosure documents. At that point, says Mellon, “We encourage them to put a business plan together and to talk to franchisees.” 3) Due diligence. This is the longest part of the process, and allows both parties to fully evaluate one other throughout. At Papa Murphy’s, due diligence includes not only encouraging candidates to speak with franchisees, but also to research third-party sources such as Franchise Business Review, Yelp, Lenders in place Papa Murphy’s sets its financial criteria for candidates based on what its preferred lenders are seeking. With the question of what lenders need to know to fund deals already answered, he says, Franchiseupdate I ssue I I , 2013  57