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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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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