Our Franchise Consultant Gives You 9 Must Read Tips For Selling Your Franchise
Got a cool concept and a system that’s running like a well-oiled machine? Thinking of taking it to the next level and becoming a franchisor? To help get you started right, we turned to franchise consultant Peter Casey of Capital Franchise Group for his expert insights. Before you sell your first franchise, check his list of tips:
- Be willing to make several face-to-face visits. The person buying into your franchise is buying the relationship and your personal experience. Since yours is not a major franchise system, it’s more important to focus on the extra attention and the support that you’re going to provide.
- Offer a bigger territory. People buying an unestablished franchise system are going to be naturally reluctant. You need to give a lot more than you will for your second, third, and fourth deal. Their commitment to you is based on trust; prove your commitment to them by sweetening the pot.
- Be patient. The process will take a lot longer in the beginning because people are going to want to spend more time and work through more issues.
- Don’t break the law. Get familiar with the rules that are in place, especially regarding earnings claims. If you think selling your first franchise is hard, it’s incredibly hard selling your second or third when the first one sued you.
- Have appropriate partners lined up. For example, a good commercial realtor who is well-versed with your model and willing to assist in the early stages can make franchisees feel good about you.
- Have good marketing materials. Know who your target market is and what they’re looking for in a franchise opportunity. Advertise on different mediums—not just print and not just the Web.
- Consider hiring a franchise broker. Someone who has closed franchise deals before can be a big help. It’s tough to run the store and be a full-time salesperson.
- Hold the bar high. You’ll be very eager to take a check from anyone you can, but as a new franchisor you need to find somebody who’s had business experience.
- Keep it local. Thinking you can support somebody who is in a totally different state at this early stage is unrealistic. Avoid the long distance relationship and start close to your home base.
What Happens When a Franchise Contract Ends? Obligations Upon Termination
The franchise agreement should also address who gets to use the franchisee’s phone numbers after the franchise agreement expires. Traditionally, this right has belonged to the franchisor, but with home-based businesses becoming the norm, franchisors that allowed franchisees to use their home phones or existing cell phone numbers might have an issue regaining control of this component of their former franchisees’ business presence.