Mark Vandegrift (00:01.127)
Welcome to the latest episode of Fran Simple, the podcast designed to make the concepts of franchising simple. I'm your host, Mark Vandegrift, and with me is the president of France Source, Steve Vandegrift. Steve, welcome.

Steve Vandegrift (00:15.191)
Well thanks, Mark.

Mark Vandegrift (00:19.475)
Well, let's start with the basics today. we went over the last two episodes, the operations manual and having your operations systematized. And then we talked in the last episode about the marketing system, and that's when you got to interview Mr. Wonderful here. And this time we're gonna talk about the franchise sales development system.

Steve Vandegrift (00:38.478)
Mm-hmm.

Yeah.

Mark Vandegrift (00:46.801)
So when we talk about the three legs of the stool, what do you mean when when you say franchise sales development system?

Steve Vandegrift (00:55.736)
Sure. Well, a franchise sales development system is essentially the roadmap for taking a prospective franchisee from the moment they first express interest in your brand all the way through the qualification, education, discovery day, approval, and ultimately the execution of the franchise agreement. And one of the mistakes we see emerging franchise owners make is thinking franchise sales is simply about getting leads.

And then convincing those leads to buy a franchise. And it really doesn't work that way. A properly designed franchise sales process, it's a mutual evaluation process. The prospective franchisee is evaluating the franchise opportunity and the franchise or, but the franchise or should also be evaluating that candidate just as carefully, if not more so.

I like to say that the three most important things to do when evaluating a candidate and your desire to build a strong franchise network is qualify, qualify and qualify.

So at France Source, we develop a structured and a systemized sales process. Again, everything's about the system. So everyone involved knows what happens at each stage, what information should be communicated, what questions should be asked, what material should be provided, and what needs to happen before a candidate moves to the next step. The objective isn't to simply award more franchises, it's to award franchises to the most qualified people who fit the brand and have a great opportunity.

Opportunity to succeed with the system. I always advise clients: you don't need any one franchise, you simply need franchises.

Mark Vandegrift (02:35.539)
Well, that's an important distinction because franchise companies often talk about lead generation as though like that's the entire sales strategy. Why isn't generating more leads enough?

Steve Vandegrift (02:44.769)
Mm-hmm.

Steve Vandegrift (02:48.981)
Well, because a lead has very little value if you don't have a good system for managing what should happen next at each phase. franchise oars they can spend thousands of dollars generating franchise inquiries, but if those prospects aren't contacted promptly, properly qualified, consistently followed up with, and moved through a defined process, franchisors can waste a significant portion of that marketing investment. There's also a difference, certainly, between quantity of leads and

And quality of leads before spending heavily on lead generation, a franchisor should understand who its ideal franchisee is. What experience should they have? What financial resources do they need? What personal characteristics are important to the brand? Are they willing to follow a system? Do their goals align with the opportunity? Then your marketing and your sales process can be built around attracting those exact people. So marketing creates the opportunity, as we like to say. The sales development system.

Mark Vandegrift (03:48.061)
Very good.

Steve Vandegrift (03:48.825)
Determines what you do with that opportunity.

Mark Vandegrift (03:53.928)
Well, let's say let's make this practical for our listener. So let's go through the process. Someone fills out a form on a franchise or's website. Okay. First step. Let's say it happens tonight and they say, I'm interested in your franchise. So what should happen next?

Steve Vandegrift (04:02.657)
Mm-hmm.

Steve Vandegrift (04:11.873)
Well, ideally, that inquiry immediately enters the franchise or CRM system, gets parsed into the system, and it triggers a defined series of actions. So the candidate receives an appropriate acknowledgement via an initial email. Someone on the franchise development team is certainly assigned responsibility for that specific lead. There's also a defined timetable for personal follow-up, and the salesperson knows exactly what the objective of that first conversation should be. But you also don't

Don't want to dump everything about the franchise on someone during the first call. So at France Source, we believe in taking candidates through the process in a logical stage throughout the process, giving them enough information to understand the next step and decide whether they want to continue. We develop our clients' franchise sales systems based on a decades-old sales adage that many people have heard. Take someone as far as they can see right now, and once they get there, take them a little further.

Meanwhile, the franchise or also has to be gathering information. That's why the CRM system, the sales scripts, the emails, the forms, the presentations, qualification criteria, even a follow-up schedule, they all need to work together and sing off the same song sheet as we say so much around here. So you're creating a repeatable candidate process rather than improvising every time a lead inquires about your opportunity.

Mark Vandegrift (05:40.125)
So what's wrong with simply hiring a good salesperson and letting that person kind of move to their own style that way?

Steve Vandegrift (05:48.716)
Sure. and there's no question a talented salesperson can be extremely valuable, but the system itself

should belong to the franchise or not to one salespeople or person. So if three different people speak with franchise candidates, you don't want three completely different versions of the opportunity or three completely different processes. consistency is certainly important for several reasons. First, candidates should receive a professional and a consistent experience. Second, management needs visibility into where candidates are at that point in the pipeline. Third, a development

Defined system allows you to train new franchise development personnel very efficiently.

And finally, you can measure and improve a documented process. It's much harder to diagnose what might not be working and not working if everyone isn't doing or is doing something different. It's just critical. So that's one of the reasons we prepare a comprehensive franchise sales development manual. It documents the process from literally initial inquiry through the execution of the franchise agreement. And it includes scripting to again ensure consistency. And it's not to say that every salesperson

will use the scripting verbatim. We always advise our clients to encourage your salespeople to make it their own. In other words, adopt the scripting to the way you normally speak.

Mark Vandegrift (07:13.492)
Well, let's dig into that a little bit. If a company engages France Source to develop its franchise sales system, what are some of the actual tools and materials that you end up creating in the process?

Steve Vandegrift (07:25.877)
Well, it it's a very comprehensive process. Again, I mentioned we developed the franchise sales development manual, which is establishes the overall sales process and procedures. Included in that manual is our recommended franchise sales action plan for the CRM system. So there's a defined workflow for managing candidates. And then we also develop scripts, as I mentioned, and talking points for conversations with prospective franchisees and the emails that support the sales process.

Then I like to say there's the candidate facing forms and materials. So depending on the franchise, that they can include an initial inquiry form for their website, a preliminary consideration form, which is a little more deep information about the candidate. we like to use an FDD request form and provide that to clients to document that a prospective franchise partner requested a copy of the F D D and they can select whether they want to receive a hard copy or a PDF version. And today, obviously ninety nine

Point nine percent of prospects elect to receive a PDF version. And that's great because it can be sent and recorded from the CRM system. And so the CRM system will also notify the salesperson when the prospect has met the 14-day FDD disclosure period that the FTC franchise rule mandates. And then we have franchise candidate interview forms. So if during Discovery Day is an example, the franchise or wants a number of his management team.

To speak with that individual individually so they can get a sense of their qualifications, et cetera. Certainly a franchise application in a financial information form. Think of a personal financial statement. We really want the franchisee to document that they do have the necessary capital and assets to move forward. And then we also develop the Discovery Day materials and the agenda for the day. We have a final steps to purchasing a franchise document that's sent out when we send them.

the FDD. We also developed a copy for the public-facing franchise section on their website. We develop a franchise e-brochure, which is typically hosted on a private page on their website. Only franchise prospects that receive the link will be able to view that. And again each step we're providing increasing levels of information. So the brochure actually includes the item seven initial investment outline. That way a prospect can either opt themselves in or opt themselves out.

Steve Vandegrift (09:55.094)
And then finally, we also develop a comprehensive PowerPoint present presentation. And that shared online with prospective franchise partners. We actually consider the presentation a great precursor to franchise discovery day because again, we're taking them deeper. And again, we're following our sales adage, take someone as far as they can see right now, once they get there.

take them a little further. So the important point is that these are not let's call them disconnected pieces. They're designed to work together as part of a robust and consistent sales development system.

Mark Vandegrift (10:32.69)
You mentioned CRM several times. A lot of business owners think of a CRM as basically like an electronic contact list or a Rolodex, if anybody even knows what a Rolodex is anymore. But why is it so important in the franchise development space, in this franchise sales system space?

Steve Vandegrift (10:41.099)
Mm-hmm.

Steve Vandegrift (10:53.345)
Great question. the reality is franchise sales, they typically involve multiple, multiple conversations and touch points, including emails, etc. And it's over an extended period of time. So franchise owers, they're not just selling some fifty dollar consumer product online.

They're discussing a significant business investment and potentially a relationship that's going to last 5, 10, 15, 25 years. So a CRM system really helps the franchiser know where every candidate is in the process. So when did we last speak? What did we discuss? What action steps did they agree to take? What information have they already reviewed? Have they received and actually reviewed the FDD? What's the next action step? Who's responsible for that action?

franchise prospective franchisee or the franchise or and then how long the candidates been sitting at a particular step in the process are are they caught up. So a properly configured CRM system, it really helps them ultimately create accountability and it allows the management team to evaluate the pipeline instead of relying on someone's memory or a spreadsheet. Excuse me.

Mark Vandegrift (12:09.288)
You said earlier that the

Steve Vandegrift (12:09.623)
We we also helped excuse me, Mark.

Mark Vandegrift (12:15.774)
Was it said it to sound?

Steve Vandegrift (12:18.017)
And let me finish then. We also help clients evaluate appropriate franchise management platforms and importantly and as importantly, develop the sales action plan and the workflow around the technology. So technology doesn't replace the sales process process, it simply helps manage and enforce the process.

Mark Vandegrift (12:41.342)
Well you said earlier that the goal isn't simply to sell as many franchises as possible, which it kinda is the end goal, but it's not. Why is qualification so important?

Steve Vandegrift (12:54.155)
Well, simply put, because one bad franchisee can spoil the bunch. So it can consume a a an exorbitant amount of fran of the franchise or's time and their resources. Financial qualification is obviously important, but it's only one consideration. You also want to understand whether the candidates' skills, their expectations, their goals, their personality are compatible with the franchise and the brand. So in other words, can they follow a system? Do they understand the owner's role? Are they comfortable with the responsibilities of the business?

Do they have realistic expectation is another big one. Do they fit the culture that you've built and want to build? And as I mentioned, qualify, qualify, qualify. So a robust sales system makes it possible for both parties to determine whether the opportunity is or isn't it a good fit for them. And turning down a franchise candidate that isn't a good fit can really be just as important to the health of a franchise system as awarding a franchise to the

right individual.

Mark Vandegrift (13:57.927)
at what point does Discovery Day come into this process and what should a good Discovery Day agenda be and what is it designed to accomplish?

Steve Vandegrift (14:09.951)
Well

I'd like to say Discovery Day shouldn't be simply a ceremonial last stop before someone signs an agreement. It's another part of the mutual evaluation process. It's in person. So by that stage, the candidates should already understand the fundamentals of the opportunity and they're excited about the opportunity. That's why they're coming to Discovery Day. So Discovery Day provides them an opportunity to meet the people who will train and support them. They'll see more of more of and experience the culture of the business firsthand.

Basically, get a sense of what a day in the life of a franchise partner would be, and they can ask more in-depth questions. And and from the franchise or side, it gives them an opportunity to spend really meaningful time with that candidate. That's why we develop a structured Discovery Day itinerary rather than leave the day

and the experience to chance. So at the end of the process, both sides should have enough information to be able to make an informed decision about whether they want to enter into what could be a very, very long term relationship.

Mark Vandegrift (15:16.88)
One thing that Francource emphasizes is that sales can't operate in a vacuum. How do all the different systems that we talked about, sales, marketing, operations, and even backing up to legal, how do those all work together?

Steve Vandegrift (15:23.969)
Yes.

Steve Vandegrift (15:33.344)
Sure. we we often describe a successful franchise program as having four critical components, as you mentioned, the marketing operations, sales and legal. So they're all interconnected. Marketing has to attract the type of franchise candidate that they're looking for. Sales has to properly educate and qualify those candidates. The legal documents certainly have to be accurately describing the franchise offering and the franchise relationship.

And the operations, training, and support systems ultimately have to deliver what candidates were told to expect. That's why developing only an F D D isn't the same thing as developing a franchise system. And likewise creating a franchise website and generating leads isn't the same thing as developing a franchise sales system. All of the pieces have to work together.

Mark Vandegrift (16:25.438)
Okay. Well, let's take a scenario here. A new franchise or brand new may not have anyone on staff who has ever sold a franchise. In fact, I would say that's probably the most common thing, right? Should they hire internally or does outsourcing the franchise sales make more sense?

Steve Vandegrift (16:35.627)
That's right.

Steve Vandegrift (16:39.339)
Mm-hmm.

Steve Vandegrift (16:46.315)
Well, it really depends on the company's resources, their growth objectives, and their internal capabilities. So building an internal franchise sales development department, obviously it requires recruiting someone with the right experience, the right training, getting them trained on the brand, providing management and technology, and certainly maintaining the infrastructure around them. For some franchise, that's absolutely the right long term solution. Other franchise ours, they don't want to have to build that department immediately.

And they elect to have one or two of the owners or a manager involved in the sales process. In these cases, we certainly provide training to them as we're developing the entire franchise sales system. Other clients, they want our support with the franchise sales process, which is why we offer outsourced franchise sales management services. So our experienced senior consultants can work directly with the prospective franchisees and guide them through that entire sales process. So ultimately,

Ultimately, outsourcing can give an emerging franchisor immediate access, we like to say, to experienced professionals who know exactly what they're doing. We've been assisting clients in selling franchises for many, many years. Now, however, in that scenario, the franchise, we make them very aware they still need to be involved in the process. And it's at important points. Candidates they ultimately need to meet the leadership team. They know that's who's going to train and support them.

And they they need to understand the company's culture as well and that and that comes from the owners in the management team. So for these reasons, we request that management or the sales representative participate in the online franchise presentation. That's always a good first introduction. and then of course Discovery Days.

Now ultimately the management team is also going to be responsible for determining candidate approval for a franchise. So it's extremely important that they really get to know that individual.

Mark Vandegrift (18:50.132)
Well one service that I find just particularly interesting is that we provide hands-on assistance with the first five franchise sales under, you know, our franchise program, our full development program. Why is that important?

Steve Vandegrift (19:02.231)
Poor

Steve Vandegrift (19:07.339)
Well, first of all, we'd like to say we want to teach our clients the art and science of franchise sales. So getting on to franchise meetings, web meetings with prospective clients and the contact. So they're handling the sales, but we're assisting with that. actually joining them on the first handful of presentations. So if anything comes up, obviously we have the experience and and knowledge to be able to address it. because ultimately developing a system on paper is one thing.

Watching that system operate with real candidates is certainly another. So we want to be able to validate the sales process that we've developed in the system. So the initial candidates actually provide invaluable feedback. So are the prospects understanding the value proposition? Are there any questions coming up repeatedly that we haven't addressed in the sales manual potentially? Are candidates stalling out at a particular point in the process? Does the CRM workflow need a little minor adjustment? And does the franchise presentation need?

Need any modifications. So by working alongside the client through those initial franchise sales, we can help validate the process we've developed and obviously make recommended adjustments when necessary. So think of it as taking the franchise sales system from design into real-world implementation. That's an important distinction. So we don't simply hand a client a sales manual and forms and materials and say, good luck, go out and multiply.

Mark Vandegrift (20:35.7)
Well, we're gonna start to wrap this up. And you know I always give you the challenge of giving us one big mistake that franchisees or franchisors make. this is a little more complex, so I'm gonna give you some leniency, maybe give us three of the biggest mistakes that you see franchisors make with their franchise sales system. What are those?

Steve Vandegrift (20:59.915)
Okay, I'd say first starting lead generation before the sales infrastructure in the systems is really ready to go.

second would be focusing on the number of franchises sold rather than the quality of the franchise being awarded. The third, I would say, is failing to follow up consistently. Okay, you know, a qualified candidate may be evaluating several franchise opportunities at the same time. So the responsiveness and professionalism they matter. And it's amazing to us that upwards of 50% of all franchise companies either delay following up or they

fail to follow up at all with that prospective candidate. So what's that tell them? Well they obviously don't care about me as a prospective franchisee. How are they going to care for me as a franchise partner? The fourth one I'm going to bring up is reinventing the sales process with every candidate, not following their own system. So without a defined system, you can't create that consistency, accountability, or really any type of meaningful measurement. and I want to add one more, overselling the opportunity, right?

it's great to be excited about your brand, et cetera. But make sure that you're pausing and asking questions and allowing that candidate to speak. and I really believe franchise recruitment should be educational and a qualification process. You're trying to establish a long-term business relationship and setting realistic expectations at the beginning is far better than creating expectations that truly your franchise system they can't deliver.

Mark Vandegrift (22:36.03)
Good. Well, as always, you get one last shot to provide our listeners with the one thing that you want to walk away from today. So give me the one thing you'd want me to remember about franchise sales.

Steve Vandegrift (22:49.193)
Well, franchise sales

It's really the the difference between having pieces and having a process or a system. I mean you can buy CRM software, you can create a brochure, you can hire someone to generate leads, but and you can develop the PowerPoint presentation. But do you know who your ideal candidate is? what message are you truly communicating? What happens when the lead arrives? What's the objective of the first conversation? how is the candidate qualified for your brand? when do you receive each piece of information?

When does that candidate receive them? And how are your follow-up scheduled? How does Discovery Day work? I could go on and on. With all of these elements, once they've been thoroughly designed and integrated, you have a franchise sales system rather than a collection of sales tools. That's what we focus on building for our clients.

Mark Vandegrift (23:41.524)
Well, that's a great distinction and probably the perfect place to close out today's conversation. you know, we we talked about operation system, we talked about the marketing system, now we have the franchise sales development system. And the one thing I think that I'm walking away with is it's simply not about getting more people into the top of the sales funnel, but it's having a disciplined repeatal process.

Steve Vandegrift (23:47.968)
Agreed.

Mark Vandegrift (24:09.694)
For getting the right type of people. And that's so critical because these folks, whoever they are, are gonna eventually represent your brand as franchisees. So the when we say systematic in all three of those areas, we really mean it. So let's wrap up today's episode of Free and Simple. Thanks for joining us, Steve. And as always, please like, share, and subscribe to Free and Simple, the podcast.

Steve Vandegrift (24:11.917)
Mm.

Steve Vandegrift (24:21.324)
Yes.

Steve Vandegrift (24:29.197)
Truly.

Mark Vandegrift (24:38.441)
Designed to make the concept of franchising simple. And until next episode, may your business expand through the power of franchising.