A Guide to Sell Franchises and Licenses

Developing a franchise model requires structure, time, process, and consistency. It is not an easy process in most cases, in particular when you are a Start-Up Franchisor and have yet to sell a franchise unit.

Selling a franchise requires patience, objectivity, and a strong value proposition – the first few franchises typically don’t come easy – the buyer needs to be convinced that a new franchise organization is a right fit for them.

Here are some tips to consider while selling franchises or licenses:

• Throw Out a Big Net
• Defined Sales Process
• Segment Duties
• Franchise Brokers

1. Throw Out a Big Net

As a franchisor, you need to be ready to “throw out a big net”. Franchise sales typically require 150-350 leads to close a sale depending on the initial investment required of a franchisee to open a location of the business.  Be ready to talk with anyone and entertain the thought of working with any potential franchise buyer. 

Don’t sell to anyone who walks in the door…but don’t stop people from walking in the door who are interested in having a conversation with you.

2.  Defined Sales Process

You need a well-defined sales process in place because of the large volume of leads required to close a franchise sale, it takes a well-defined process to manage this effectively. 

FMS Franchise uses a Franchise specific CRM to manage this process and understand where buyers are in the sales model – whatever you use, you should use something…without an effective lead management tool, you will lose your ability to focus and drive leads from suspects to prospects to deals.

3. Segment Duties

In almost twelve years as a franchise consultant working with business owners to help franchise businesses – I have rarely seen a business owner be effective in the franchise sales process outside of closing the transaction.  Franchise buyers are understandably extremely critical of everything a franchise and company has to offer in a franchise concept.

The question is always going to come back to why should I buy a franchise from you when I could figure this out on my own.  A franchisor should have someone who is taking the initial contacts and “screening” prospects to set them up for the close. 

No one in the organization is better or more effective at closing the franchise transaction than the owner/founder of the company, on the flip side, no one is worse at being objective and remaining calm, cool, and professional when hit with initial questioning by a prospective franchisee. 

Have someone responsible for franchise sales who work with s the suspects…when they find a prospect, that is when you get the owner or founder of the company involved.  This is a service that FMS Franchise provides with outsourced franchise sales and franchise development.

4. Franchise Brokers

Should you work with them?  Yes. 

There are great organizations that provide structure, credibility, and support to franchise brokers, you should inquire with them about which brokers to work with and how to connect with valuable broker contacts. 

Why do we say yes to working with brokers?  Because it goes back to the “Throw out a big net” theory – brokers can provide leads to you in your pursuit of adding new franchise partners, period. 

You, as the franchisor, have the option to sell to the candidates they bring to you, so you are not held to take the partners they introduce you to unless you choose to. 

Good brokers are paid 40-50% of the initial franchise fee. It is worth every penny of it if you tie it into a good broker relationship.  Some franchise systems such as Puroclean have sold a large amount of their 400-plus franchises through broker referrals.

Brokers will market for your franchise, generate the leads, introduce the model to franchise prospects and hand you a qualified lead for you as the franchisor to close. 

It can be an effective marketing and lead-generation model for a new franchise concept.

For more information on franchise development and franchise sales, Contact FMS Franchise or call (800) 610-0292