Franchise Sales: Fakers or Deal Makers

Franchise Sales: Fakers or Deal Makers (part 1 of a two part blog)

Franchisors ask us all the time, "How many leads does it take to find a franchisee?"  Answer is one lead, but the right one. In a perfect world finding lots of “The right one” would be great. However, we don’t live in a perfect world.  In the franchise recruitment process, we develop several leads. These leads fall into two categories: Fakers or Deal Makers.

The art and science of franchise recruitment:

As sales reps, we only have 8 hours a day to make our magic happen.  In those 8 hours we want to make the most of our time; prioritizing our efforts with deal makers. The Deal Maker can be awarded a franchise and actually pay for the franchise fee, build-out and operating expenses. We can’t afford to waste time with fakers. Fakers cannot buy, or worse yet, will NOT be awarded a franchise due to lack of skills, motivation, and/or civil behavior (yes we have found criminals and con-artist looking for franchises).

This blog posting is the first of two parts.  In the art and science of franchise sales, the science is in disqualification, the art is in the qualification. Since deal-makers will drive a deal and want to buy (Sometimes we just have to get out of their way and let them buy!), it makes sense to discuss the fakers and the science of disqualification.

Based on the scientific approach of observation and measurement here are the behaviors of fakers:

Calling for a friend:

Really?  What’s your “friend’s" name? Think about it, if the friend is too busy to conduct due diligence, how will they have time to run a business? A true candidate, will identify themselves, their intentions, skills, experience and financial capabilities.

Yes, there are times when a high net worth individual will hire a lawyer or other trusted advisor to conduct due diligence in a franchise acquisition.  In that case, a verbal or written disclosure should be made as to the representation. Families and friends will also buy franchises. When they do, all team members should be involved and identified.

Contact Information in the initial lead:

If you see [email protected][email protected], or [email protected], you need to run screaming.  And if you have a prospect named "Belinda Edelstein" and her email is "[email protected]", or any other contradictory name that's way off base, that's another huge flag.  Not always, but usually, you should run.

Another set of red flags is Google Voice or Pre-paid cells.  1) Candidates are using these numbers to conduct franchise searches with the intentions of throwing away the numbers.  Clearly a sign of a weak individual that cannot confront an unpleasant conversation. 2) Candidates that have bad credit will not be able to afford second or third lines.  Worse yet, candidates that cannot afford a cell phone plan, will not be able to get any supplier credit and not be able to conduct a business anyway.

Indefinite Time-Frame:

“I’m maybe thinking about starting a business in around 4 or 5 years. I’m not really sure. If I find the perfect business I might be able to get started in 3. But I’m not really sure.”  YIKES!

The internet has allowed individuals to conduct due diligence far in advance. It's actually NOT a smart way to proceed. A wanted area can be sold at anytime, never mind in 3 years. Why try to buy something that is not available? We facilitate buying, not shopping. Spend time with buyers, not shoppers. Politely offer your contact info and invitation to send emails detailing news on brand and new features of the brand.

Technology can help here. Placed in a lead nurturing campaign, these buyers might make a decision and self identify themselves. Selling a franchise requires a timeline. We should set the expectation of that time frame and buyers should provide the same time-frame.

Unorganized- disorganized- disrespectful:

They miss appointments with you, continually delay sending in their franchise application/request for consideration, don't do their due diligence calls, "I never got your email/can you resend it to me?" and “I’m really busy right now. Just send me your information and I’ll get back to you”.  Reply “OK, I’m really busy too. Let’s set up an appointment right now...for the 17th...of never. All three behaviors are bad behavior and will clearly be indicative of how they will conduct business.  It’s also an indication that the potential buyer doesn’t have the tools to manage his/her life. How will they be able to successfully run a profitable franchise? Great candidates are punctual, agree to and meet deadlines as well as, setting and meeting expectations.

Something to hide:

PLEASE don't do a credit check on me...I'm re-financing my house...I'm going through a divorce, and dealing with tons of medical bills that hit me all at once...or I was the victim of identity theft. And so on and so on. 9 out of 10 times this is a not just a flag but a "Jolly Roger" Pirate flag. When and if you get their credit check back and it is a score of less than 600 (some of you may say 700) then you should pause. Probably forever. I have made the mistake (more than I can count) of waiting WAY too late in the sales process to do a full credit check on "Mike the Perfect Prospect". Do your background checks early. Or you'll be very irritated; looking back at the time you spent, that you'll never get back. (see franchisor behaviors below)

We also need to protect our brand from the uncivil and the criminal.  No need to sell to a buyer that cannot get credit, a license, or pass a mandated background check for conducting business. Inability to pass CORI check, inability to operate a vehicle, restraining orders and parole are checks put in place for unsavory, dangerous and unpredictable individuals to be restricted from conducting public business. It's better that we stop these candidates in the sales process, instead of realizing it in a front page news story.


I'm too Busy to Review Your Info:

When you ask, "Have you had a chance to go to our website to review any of our information yet?" and the answer is, "I haven't had time and I'm not sure when I will." Closely related to, unorganized- disorganized- disrespectful. This buyer is not serious and is wasting your time.  We cannot read or conduct due diligence for our prospect. A great candidate will want more information, will want to talk to more people, and will want maps, spreadsheets, market analysis and MORE! Give it to them!

Negative Nancy or My Boss Doesn’t Appreciate me Bob:

“To be honest, I really don’t like people. I don’t get along with my boss or any of my co-workers. I hate my job and with the current administration, we’ll all be destitute in the next 4 years.”  There is no bigger flag that someone will be difficult to deal with, than a franchisee that's a cultural cancer to your entire system. You can’t train personality. This is someone who is beyond having a bad day. Typically these leads are having a bad day and are going to take their frustrations out on a lead portal.  Good thing they only last one phone call and are easily disqualified. However, be careful here, sometimes a bad experience DOES motivate a buying process. Make sure they have the skills, leadership abilities and financial capabilities to proceed.  A bad event could trigger a lifelong ambition to start a business; this is a great candidate, as we can shorten their path to business ownership.


“I have a budget of $50,000, I’m only interested if I can earn a six figure net income in year one, I want an exit strategy where I can sell the business for 10X cash flow in 5 years, and the big has to be a passive investment.”  When I get a prospect that has unrealistic expectations like this, I turn it around on him/her. "OK, set let me see if understand what you are saying. You would like to invest under $50,000. You expect a guaranteed six figure salary over the next 10 years while working no more than 5 hours per week, and then you want to be able to sell it for $1MM."  If we could deliver that kind of ROI, we'd have Warren Buffet giving us $10 billion for our company. "I know the perfect franchise for you!"  Actually, it’s called “It Doesn’t Exist”.  In all seriousness though, you need to set expectations early on.

Expectations should be set and comparisons should be made with potential franchise investors. A bank account yields 2% interest, an IRA/401K around 6-12%, passive real estate around 24%, and active participation in a business should have a 100-124% return in a 5 year period.  Active means active and over-achievement is always possible.

They’re Just Not That Into You:

There was a movie a few years back called, He’s Just Not That Into You that was inspired by a line of dialogue in the HBO TV series "Sex and the City". Here’s the premise, you go out on a date and you think things are great. But two days go by and you haven't heard from him/her. You call and leave a message. Nothing. You send a text message, or two and still nothing. Granted, we all have busy lives. However, when a person you are interested in and who you thought was equally interested in you, is showing classic signs of just not being that into's probably the case. At some point you have to accept it and move on. The same EXACT thing happens in franchise sales. Yet, we spend countless hours chasing a non-responsive candidate; making excuses why they aren’t responding.  If they aren’t responsive now, imagine what they are going to be like when your ops people are trying to ramp them up.  If it makes you feel productive to keep calling and emailing an unresponsive prospect for weeks at a time, knock yourself out. What we should be saying to them is, "We're just not that into you!" If the Phone's not “a ringing”, these leads are not “a calling”. Good leads are calling and emailing you. You recognize their number and/or their voice.

We all want to sell franchises, earn fees and collect royalties. Sometimes that can get in the way of looking at a candidate and seeing beauty in GREEN of cash and ignoring RED of reality. These are the behaviors that we should be conducting in our sales process and our awarding of a franchise. The FTC protects the franchise buyer. We have to protect ourselves, as franchisors, in the selling process.

Online Research Findings don’t match initial qualification answers:

With the internet, you can find amazing amounts of background information on a prospect, very quickly. On Zillow or Trulia, you can find the value of their home, if it’s for sale, foreclosure history, etc. If you have a $100K cash investment and the prospect lives in a shack valued at $30k, it’s probably not going to pan out for you. If you find that your prospect has a white supremacist or porn blog, you probably should have concerns. When you find photos of your prospect passed out in Las Vegas as his profile photo on Facebook, you should be pondering this one. Take 5 minutes to Google someone and do your own due diligence, just like they do on your company.

Wrong Personality Fit:

If you ever watch Undercover Boss, you can see a very basic formula. They show a superstar franchise, a poor performer and a potential franchisees “go-getter”, who needs a helping hand. The common denominator being, successful franchisees all have similar personality characteristics that make them successful. Same thing could be said about the underachievers. I find myself screaming at the screen when I see the whining, underperforming franchisees because for all intensive purposes, they should never have been sold a franchise. You can give them extra marketing dollars, provide them additional training and more. If they have a horrible personality and poor people skills, they are going to struggle and ultimately fail.


In the next section of this two part blog, we will address the art and potentially some science, of qualification.

Share this article:
We are a team of franchising professionals that provide solutions for development, consultation, and expansion of businesses.

Quick links

© 2023 Franchise Marketing Systems - All rights reserved. Terms & Conditions • Privacy Policy • Site Map
phone linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram