The Franchise Manual Podcast – Episode #20 – Working with Franchise Broker Consultants
Lori Kiser talks about how to best utilize a franchise broker consultant company. Everybody wants to know how to find the path to granting more franchises, and in this episode we definitely talk a lot about that. We will discuss what is a franchise broker consultant, how to make your business ready to utilize their services, and how to effectively work with them once you have hired them.
Lori Kiser Intro
Get to know Lori Kiser
Topic Segment ? How to work with Franchise Broker Consultants
Quickdraw Questions plus the first time ever Lyrics Quiz
Topics discussed in this episode:
Franchise Broker Consultants are not business consultants in the traditional sense of the word. They specialize in producing qualified, vetted leads for franchisors.
A franchise broker consultant is not part of the sales team of the franchisor. They will not take the prospect through the franchisor’s sales process, though they will stay involved as the candidate passes through the process.
In order to be successful with a franchise broker consultant, a franchisor must have the following already in place and running within their concept:
An in-house franchise development staff (sales team)
A well-defined sales process
The ability to go beyond the generic 6-step sales process, and know how to learn and understand the prospects dreams, desires, and business goals
Unit economics that are positive and consistent
A leadership team with a solid understanding of franchising
A typical start-up franchisor is usually not a good candidate for a franchise broker consultant group because the broker consultant is paid based on successfully bringing a prospect that eventually signs a contract with the franchisor. Because start-up franchisors typically don’t have the infrastructure in place to handle the lead volume, broker consultant groups are less likely to accept them as a client.
How to take your startup system and get it ready to be accepted by a broker consultant group:
Create a specific landing site for franchisees. This will demonstrate to the broker consultant group that you are knowledgeable and organized, and that you have a place to start a new prospect so that they don’t fall between the cracks once the prospect is delivered to the franchisor.
Create a sales process that works for your team and track the performance of the sales process and the development team. If you can?t prove that you can successfully close a prospective franchisee then a broker consultant group is not very likely to burn good qualified and vetted leads with your system.
Be able to show GREAT unit economics ? meaning, be able to show that the franchisees are making money.
Demonstrate that all of the existing franchisees will validate well. Know that all of the franchisees are happy and that they will sell that happy story to a prospect who makes the validation calls.
Demonstrate that the franchise system has all (most) of the amateur mistakes out of the way so that the franchise broker group?s brand won?t be tarnished by referring leads to the franchisor client.
Have an FDD that is registered in al of the required states so that the franchise broker consultant will not be limited by geography. Similarly, be ready to offer and close franchise deals nationwide, including developing a nationwide support group to service the new franchisees.
Demonstrate that your system can handle the stresses of sales volume, such as being able to build out a location for multiple new franchisees while simultaneously walking a second set of prospective franchisees through the sales process, AND manage all existing franchisees at the same time. This requires a team that is in place and seasoned.
A typical franchisor broker consultant will sift through over 100 candidates before they find one that is worthy of passing on to the franchisor clients.
The Franchise Rule does apply to a franchise broker consultant, although the broker consultant shouldn’t be doing any selling of the specific system.
Once a franchisor is able to join forces with a franchise broker consultant group, what is the best way to manage that relationship?
Think of the broker consultant as a talent scout, scouting players for your team
The franchise broker consultant will act more like a brand ambassador to the candidate.
Since the franchise broker consultant already an established relationship with the candidate, the franchisor should trust and utilize the candidate’s information from the broker consultant when the franchisor is brought into the relationship.
Be open to adapting to the processes, nomenclature, personality, and style of the franchise broker consultant group, as well as to the type of candidate that they typically generate
There are different types of consultant groups as well as different types of consultants within each of the groups. You will likely only work with a handful of consultants within a consultant group. That is normal.
The best franchise broker consultants are not as enticed by your commission dollars as they are developing their referral network. These consultants rely heavily on referrals from happy candidates who eventually convert to franchisees. While it is important to pay consultants a fee that is competitive, understand that they need to like you and believe that your system is successful before they burn good leads on your system.