Frontloading Success: Increase Quality New-Owner Agreements

Company growth comes through quality franchisees executing the brand’s vision.

By Chris Goethe

When you hear people talk about franchise relations, you may think about the communication and support that begins after a franchisee signs the agreement. But, for franchisors to frontload success and increase quality new-owner agreements, the most critical time for communication and relationship-building takes place before the dotted line is signed. From inquiry through signing day, establishing an effective communication process is vital to building a strong relationship with your future franchisees and ensuring success for your business.

The Interview Process

If you’re part of a franchise company, you know the recipe to finding successful franchisees lies in the quality of your interview process. The purpose of the interview is about finding the right fit; making sure that this new franchisee is someone who will contribute to your overall success and help your business grow.  Sure, it sounds like relationship advice; and, it is.  But, in business terms, that means finding a franchisee who understands and embodies the values of your organization first, while also having the expertise and drive to generate revenue, expand your business footprint and grow the brand. Plato once said, “The beginning is the most important part of the work.” Leading companies like Google and others place great emphasis on the quality of the interview process. In fact, after interviewing at Google, less than one-half percent of all applicants are hired. As it relates to franchising, communications between franchisor and potential franchisee should foster a relationship in which both parties are able to clearly ask about and understand the opportunity and one another — setting a foundation for the future. Primrose Schools also invests heavily in the initial relationship, the interview process, with prospective franchisees. On average, we receive more than 2,100 inquiries annually, and only about 4 percent are awarded a new franchise. For us, focusing on relationship-building naturally leads to a more effective sales process and, ultimately, contributes to business success.

Question to and From Prospective Franchisees

Questions to ask prospective franchisees:

1. Why are you interested in franchising with our company?
2. What personal values do you share with our company?
3. What are you most proud of in both your professional and personal life?
4. What are your long-term goals for your franchise?

Questions to expect from prospective franchisees:

1.  What length of time has your longest-serving franchisee been with the company? And, why would you say he is so successful?
2. What are the top three things you look for in a new franchisee?
3. Can you tell me about the training and support you provide to your franchisees?
4. What are your current business goals and where do you hope the company will be five years from now?

Bringing Out the Best

In many ways, success depends on your ability to build a strong team. According to best-selling author and international speaker Tim Elmore, “leaders must create an environment that brings the best out in people.” For franchisors, this environment begins with the initial inquiry. How does your company bring out the best in your prospective franchisees? Are you focused on their capital and ability to buy into your franchise? Or, are you first listening and learning about who the prospect is as an individual — their motives, character and passion for your business and brand?

Tips for Listening and Responding

• Refrain from over-communicating about your brand and give the prospective franchisee the opportunity to share his personal story and what he brings to the table.
• Clarify and ask questions to better understand and show genuine interest.
• Try to understand the prospect’s viewpoint as it relates to your brand.

By nature, people entering franchising come from a variety of personal and professional backgrounds, including corporate careers, military service or even retirement. Consider how your prospective franchisee’s skills from previous careers or life experiences might transfer to your business to frontload success for you both.

The Right Model Leads to Mutual Benefits

Assembling the best-in-class individuals for your business begins with a highly interpersonal communication model. The foundation for this model is built on trust. To frontload success and increase new-owner agreements, your prospective franchisees must trust the motivations, capabilities and cooperation of your company. According to leaders in the human resources industry, when we have a high degree of trust in another person, we’re more willing to share our thoughts, feelings and ideas. It simplifies our interactions and gives us confidence in another’s words and actions. To further ensure you and a prospective franchisee both benefit from the communication process, try to implement the following strategies:

• Have a hands-on, proactive sales team readily available.

Walk each potential franchisee through the process and proactively respond to frequently asked questions. Consider in-person or phone call opportunities to connect early on rather than through emails. And, have a dedicated team that is both demographically and geographically diverse. According to Forbes, one of the clear business benefits of direct communication includes authenticity in the dialogue as an exchange of thoughts and ideas and opportunity to meaningfully collaborate. This first step helps build the mutually beneficial relationship with your future franchisee.

• Initiate the relationship between prospect and existing franchisees.

Most franchise companies have a model for peer-to-peer training once a franchisee signs on; however, consider the pre-signing opportunities. Introducing a prospect to your existing franchisees helps them to get a feel for the culture, commitment and daily operations of running a franchise location(s). It also creates the opportunity for prospects to ask candid questions with honest transparency and allows them the chance to gauge the level of support you will provide once they sign the agreement. Ultimately this fosters the foundation of trust and confidence.

•  Allow prospective franchisees to engage with the leadership team.

Introduce prospects to the leadership of your company at in-market meetings or at your headquarters for a Discovery Day or final review of the franchise disclosure document several weeks before the official signing. First impressions can be lasting, which applies to both your leadership team and the prospective franchisee. A 2012 CareerBuilder survey found that approximately 40 percent of American workers had never met their CEO in person and only 35 percent of workers could name all of their company’s C-level officers. In most cases, franchise companies are founded in the roots of entrepreneurism. And, the attraction of other entrepreneurs is a key aspect to the perpetual growth of the company. Connecting strong franchisee candidates with your leaders is essential to building a culture of continued purpose, passion and entrepreneurism in your future franchisees. Understanding and emphasizing the importance of initial franchise relations will position your brand for success and get new franchisees off on the right foot. Company growth comes through quality franchisees executing the brand’s vision. Selecting the right personality and experience upfront can potentially reduce the number of issues later. For the franchisee-franchisor relationship at Primrose, that’s what it is about; discovering possibilities and opportunities and then building trust with both competent and passionate entrepreneurs.

Chris Goethe is vice president of franchising for Primrose Schools, a national accredited early education and care provider serving 60,000+ children in 285-plus schools across more than 20 states.  Find him at fransocial.franchise.org.