Franchise Sales Funnel
Learn about the main stages of franchise sales and how to effectively work with franchisees at each of them.
Selling a franchise is a transaction that takes place in several standard stages. In this article, I would like to describe each stage in detail, as well as provide recommendations on how a franchising manager can act more effectively at each step towards closing a deal.
But before we move on to the stages directly, I will give general recommendations for the process of working with the funnel and try to share some tips that will help you in your work.
But before we move on to the stages directly, I will give general recommendations for the process of working with the funnel and try to share some tips that will help you in your work.
Duration of the transaction
Track the length of the deal for all your leads and strive to shorten it. Naturally, there will always be very long negotiations, but the task of the founder, franchise director, and manager is to reduce the deal time. Additional calls, meetings, and other activities will help in this.
Managers are very fond of dragging out time, postponing meetings and calls for later, counting on the fact that the franchisee himself will take the initiative and promote the deal himself.
Managers are very fond of dragging out time, postponing meetings and calls for later, counting on the fact that the franchisee himself will take the initiative and promote the deal himself.
Conversion
Constantly work on conversion. Find ways to move your leads to the next stage. Increase the quality of your content so that as many people as possible follow your brand. If you see that you have a lot of applications "frozen" after the meeting - hold an event with the founder and "finish off" with a bright performance. Share the achievements of your network in the email newsletter to confirm the sustainability of your model and, as a result, warm up the audience's interest.
When is the optimal time to call a lead?
You need to call within 24 hours, while the person still remembers who they submitted the application to. A potential franchisee has sent an application not only to you, but also to three or even ten other franchises. They have already started a dialogue with some of them, have already met with some of them and received the terms, so time is running out. Take action!
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Franchise sales funnel stages
Content
This is, if I may say so, the zero stage of franchise sales. Our potential franchisee follows our brand, consumes our content, but does not take any active steps to contact us.
At this stage, the future franchisee does not have a formed need to buy a franchise. He reads the materials, but does not yet consider himself as a franchisee.
To get the most applications and interest as many potential franchisees as possible, we need to be interesting to the audience, we need to be heard. People should want to at least read about us.
The metrics of this stage are the number of people who read our posts, views on YouTube, comments on social networks, etc.
At this stage, the future franchisee does not have a formed need to buy a franchise. He reads the materials, but does not yet consider himself as a franchisee.
To get the most applications and interest as many potential franchisees as possible, we need to be interesting to the audience, we need to be heard. People should want to at least read about us.
The metrics of this stage are the number of people who read our posts, views on YouTube, comments on social networks, etc.
Choice
The consumer of franchises has a need to buy a franchise. The potential franchisee identifies a shortlist of franchises. Our task is to be on the list of franchises that our consumer is interested in.
At this stage, the rational advantages of your franchise are important: franchise fee, payback period, royalties, number of open points, how long you have been on the market, etc.
The consumer is already starting to show up: asks questions in private messages, writes comments, shows interest.
It is important that the franchise website has comprehensive information and a convenient form for submitting an application so that it is convenient for the user to contact you.
At this stage, the rational advantages of your franchise are important: franchise fee, payback period, royalties, number of open points, how long you have been on the market, etc.
The consumer is already starting to show up: asks questions in private messages, writes comments, shows interest.
It is important that the franchise website has comprehensive information and a convenient form for submitting an application so that it is convenient for the user to contact you.
Application
An important point: when a consumer leaves an application, it means that they are interested and ready for action.
The way the franchise purchase application is processed will determine how the further negotiations will go.
It is very important that the application is processed promptly.
During the application process, the sales manager should identify the interest and determine the level of interest of the interlocutor.
The way the franchise purchase application is processed will determine how the further negotiations will go.
It is very important that the application is processed promptly.
During the application process, the sales manager should identify the interest and determine the level of interest of the interlocutor.
Meeting with the franchisee
I usually give a franchise presentation at a meeting and only then send the franchise terms by email.
The meeting can be held via Zoom or in person. It doesn't matter.
For me, a franchise presentation is a well-directed process with its own timing and intensity. I believe that only by constantly refining and modernizing the meeting script can we improve performance and achieve better results.
Create a presentation that you will show during your speech and then send it to the interlocutor by email along with any informational materials about the franchise.
The meeting can be held via Zoom or in person. It doesn't matter.
For me, a franchise presentation is a well-directed process with its own timing and intensity. I believe that only by constantly refining and modernizing the meeting script can we improve performance and achieve better results.
Create a presentation that you will show during your speech and then send it to the interlocutor by email along with any informational materials about the franchise.
Franchise terms
I usually don't send the terms without a meeting. It is important for me to understand who I am dealing with. I want to identify the interest and understand the background of my interlocutor.
In addition, it is important for me that the franchise terms are presented only after describing all the advantages of the franchise and are correctly understood.
Along with the franchise terms, any additional informational materials about the franchise can be sent: financial model, menu, requirements for the premises, everything you consider necessary for making a decision.
There is a small trick here: the potential franchisee leaves a request to quickly receive the terms and independently make a quick decision. I want him to invest his time and attention in this deal. If the franchisee is not ready to invest even his time, then he will not invest money either.
In addition, it is important for me that the franchise terms are presented only after describing all the advantages of the franchise and are correctly understood.
Along with the franchise terms, any additional informational materials about the franchise can be sent: financial model, menu, requirements for the premises, everything you consider necessary for making a decision.
There is a small trick here: the potential franchisee leaves a request to quickly receive the terms and independently make a quick decision. I want him to invest his time and attention in this deal. If the franchisee is not ready to invest even his time, then he will not invest money either.
Franchise agreement
The next step is the discussion and approval of the franchise agreement. This stage includes all amendments, exchange of protocols of disagreements, additional meetings with lawyers, etc.
The agreement is signed at the end of this stage.
Often, the signing of the agreement takes place in person, with the presence of the Founder of the franchise in a solemn atmosphere. But in 90% of cases, it is simply an exchange of copies by mail.
The agreement is signed at the end of this stage.
Often, the signing of the agreement takes place in person, with the presence of the Founder of the franchise in a solemn atmosphere. But in 90% of cases, it is simply an exchange of copies by mail.
Payment of lump sum fee
The final stage of the sales funnel is the payment of the franchise fee in accordance with the terms of the agreement.
After this stage, you can proceed to opening a franchise outlet.
After this stage, you can proceed to opening a franchise outlet.
The sales funnel for franchises can be visualized as follows:
At each stage of the deal, a certain number of potential franchisees stop, and the task of the franchise sales manager is to move the deal to the next stage.
Each stage indicates a certain number of involved consumers. This is a conditional value chosen for the example.
I suggest you build such a chart for your franchise, understand how many applications you have "frozen" at each stage and think about what can be done to move them to the next stage of the deal.
At each stage of the deal, a certain number of potential franchisees stop, and the task of the franchise sales manager is to move the deal to the next stage.
Each stage indicates a certain number of involved consumers. This is a conditional value chosen for the example.
I suggest you build such a chart for your franchise, understand how many applications you have "frozen" at each stage and think about what can be done to move them to the next stage of the deal.