Finding the RIGHT buyer for our franchises

Posted June 7, 2021 in
Leaders Leaders
We have been in business for over 25 years, and have 50 franchises across the country. The problem, frankly, is out of those 50 franchises, only a handful are operating where they should be. We are working on that (using a lot of what I am learning here.) But, we are starting to think about selling more franchises again (we pretty much stopped selling locations 10-15 years ago.) But, one of the big things we want to do is learn how to find better buyers. In the past it was pretty much, if they write us a check, then we'll sell to them.

Our franchises are a great business to own, with a fairly low cost of entry, low overhead, and significant revenue possibilities, but most of our owners just aren't really that motivated to grow. What strategies do you all have to find the right buyers? The types of folks who really want to (and will) work hard to grow their business. Does anyone know of someone doing seminars/training on how to find buyers? To teach us better ways to get the right people excited about joining the team.

Any thoughts would be appreciated. Thanks.
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Connor DeLaney
Hey  Dale Pease ! Couple questions come to mind for me:

1. How do you go about qualifying and disqualifying applicants? Like you mentioned, it used to be anybody with a body and a checkbook could be there, but now that's becoming more specified.

2. What kinds of training or onboarding are your franchisees currently receiving when they sign on with your company? Is there an excitement build up during that process?

Jim Schultz   Lisa Carroll   Tanya Sweeney   Vin Gaeta  what might you recommend here? Or is there someone else who comes to mind that could help Dale out? 
Dale Pease
1. The qualifying and disqualifying part is where I'm struggling. Everyone will talk a good game (well, almost everyone.) So, what can we do to get through the noise and find the best buyer? - One thing here, we are thinking about being much more rigorous about what will be expected. "If you really want to grow this business, you will need to do XYZ.... and if you aren't up for this, then we probably aren't a good fit." So, almost giving them the opportunity to disqualify themselves. But even then, I can see most agreeing and saying they are on board. What are the things to look for? I know this is very similar to hiring someone, but with employees, if they don't work out, you can fire them. It is much harder to fire a franchise owner.

2. Again, it used to be very little training was done. Just a couple of weeks on how to use the equipment, etc... Now, with a few of our existing locations, we've begun in-depth weekly business coaching. Along with active involvement in their marketing. And more hands-on training with their sales teams and crews.
Connor DeLaney
Appreciate the input, something that comes to mind for me here is a qualifying activity during the application and/or interview process to show situational awareness and the skillset you may be looking for! 

Carolyn Edgecomb Tom DiScipio , Justine Timoteo , or Kristen Harold while they may not be specific to franchising, could you share some experiences we've had with situational activities that have really helped? 

Ryan Shutt Brian Dalinghaus Taffy Ragan  what have your hiring processes for different team members looked like that Dale may be able to take note from? 
Tom DiScipio
Really appreciate you asking this question here Dale Pease !

Honestly, I've got so many thoughts around this topic, it might be worth it for us to connect directly to talk through it. If you'd be open to doing that, shoot me a DM and we'll hop on Zoom.

For the benefit of anyone else reading this... there are three things that come to mind for me (and forgive me if these things are already in practice):

1. There should be a pretty rigorous application process: To your point of buyers "proving" their desire and abilities, they should have to show that they're qualified via testing, scoring, live activities, over the course of a week or so to show that they can hack it. Also, not everyone that applies, should be allowed to go through the full application process. Petra Coach, the company that helps us implement the ScalingUp business framework at IMPACT has an intense vetting process for new coaches (not a franchise, but similar in how they own their book of business) on their team. They expect a level of excellence that then becomes the culture across all coaches, and the rising tide lifts all boats.

2. If you want franchisees to grow their businesses, is it possible to give them specific growth targets that then unlock more with their "membership?" In other words, are these owners incentivized to grow if that's the culture that you want to create? This also becomes very good marketing collateral to attract the right buyers. HubSpot does a great job of this. Depending on the level of partner you become within their partner ecosystem (silver, gold, platinum, diamond, elite), will determine the level of support you get from them, how many leads they deliver to you, and the public recognition you might receive.

3. Are you showcasing your leading franchisees as "the model" franchisee that all others should be striving to be? Here's a great example... We used to work with a local SONIC Drive-in franchisee who was absolutely killing it. Their locations were some of the highest-trafficked locations in the country primarily because they had built an amazing social media following, a great website, and ran their locations like well-oiled machines. Their success was contagious within the SONIC ecosystem and they spurred on many other locations to improve their social and websites in order to replicate that success.

Hope this was helpful, Dale! Like I said... this is a fun topic to brainstorm on. Happy to talk more.
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Dale Pease
Tom, these are all great points.

1. Creating a much more rigorous application process, seems to be key. It's not about the answers they give to questions, it's how they actually work through problems. Their skill at navigating complex issues and actively seeking solutions. I love this idea!

2. This is something we're working through right now as we re-write our franchise agreement and franchise disclosure document. How can we incentivize our existing franchisees, as well as new franchisees to actually WANT to grow?

3. We have been doing this a ton with our one corporate-owned location. It has seen 30-40% growth year over year for the past 3 years. But somehow there is this perceived idea "Of course they are doing well, they have some kind of inside benefit because they're corporate-owned." We have worked to combat this idea by saying every benefit they have is available to you too. But it's been an uphill climb. This year we hand-picked three locations to do weekly business coaching with. One is actually starting to see significant growth. One is still pretty apathetic about the idea of growth. And one has decided they want to sell (they see the need to do the hard work, but just don't want to.)

I'd love to talk more with you if you're willing. I'll DM you.
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Vin Gaeta
Tom beat me to the punch! I was thinking about SONIC as well. 

To his point about the application process, I would actually use some assignment selling and give them lots of educational material to review before moving them further. If they don't want to review the material in a timely fashion they may not be the right fit for you. 

As you vet these potential franchises, what questions are you asking/could you ask to ensure they're in the growth mindset, are excited about growing a franchise for y'all, and want to learn how you've been successful. For me, if I wasn't confident in those they may not be a fit for the new program it sounds like y'all are using. 
Dale Pease
It always seems to come down to assignment selling. :-) I am really starting to get a vision of what this could look like. Thanks!
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RJ Grimshaw
Hi Dale, seems to me you outlined two different topics above.  1. Getting growth out of your existing Zees. 2. Growing the numbers of Zees across the country.  If you had to prioritize which one is more important? Look forward to continuing the dialougue. 
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Dale Pease
This is a really great question. I know I'm not supposed to answer both, but to a certain degree, it is true. We are in the process of turning the ship with our existing "Zees" but, it is a long, slow process. We are making progress, but it is incremental.

So, we're starting to think about jumpstarting it to a certain degree, by bringing in new blood--folks who are from the beginning, all in on the new way of doing things. The more examples of success we have, the more quickly we can get the rest on board.

Right now, we really are just in the planning stages for finding new franchise owners, and in the meantime, we are continuing to look for ways to help our existing locations too.
Dale Pease
Just a funny note. I'd never heard the term "Zees" before. But about an hour after I read this message I got a sales email from a franchising software company and their website is filled with this term. Zees, Zors, and even Yees (for employees.) Just cracked me up. Baader-Meinhof Phenomenon anyone?
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RJ Grimshaw
That is funny. I have been in this space and worked with over a dozen Zees & Zors. 

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