Are You Losing Franchise Deals?

Franchise Development

New sales study provides hiring and training practices for franchise development.

By Steve Olson, CFE

Today, too many brands struggle with a growing recruiting epidemic costing millions in marketing dollars and lost royalties. Even the best franchise sales leaders are caught off guard.

Addressing this problem, 41 successful “Selling CEOs,” chief development officers and proven sales execs volunteered to participate in our Franchise Sales Masters study to help overcome performance gaps in hiring and training qualified sales people. They certainly know what it takes to successfully recruit franchisees. But they admitted that 50 percent of their own hires fail to achieve expectations and sales quotas. The great news is these “pros in the know” shared their collective insights that can help us evaluate and understand what makes great sales people in our business.

Participating Sales Pros

Survey participants in this study represented more than 100 franchise brands including AlphaGraphics, AmeriSpec, Budget Blinds, Carvel, CertaPro Painters, Checkers Drive-in Restaurants, Cinnabon, Denny’s, Express Employment Professionals, Dunkin’ Donuts, The Dwyer Group, El Pollo Loco, Fantastic Sam’s, Floor Coverings International, Great Clips, Jack in the Box, Jersey Mike’s, Jiffy Lube, McAlister’s Deli, Moe’s Southwest Grill, Money Mailer, The Maids International, Martinizing International, Moran Industries, Mr. Handyman, Popeye’s Louisiana Kitchen, PostNet International, RE/MAX, Seattle’s Best Coffee, Snap Fitness, Speedee Oil Change, The Dwyer Group, The UPS Store, Tropical Smoothie Cafe, TSS Photography and many more.

First Challenge: Selling Franchises is Counter-Intuitive

Many great sales people entering our business get frustrated and fail at franchise recruitment. Their careers have been wired with traditional product selling. They dazzle us with their accomplishments, professionalism and excitement to join our rewarding world. They sincerely believe they can adapt to our recruiting methods, nodding “yes” in their interviews when told franchise prospects can’t control the buying process, can’t negotiate material changes in the agreement, and will be removed from the system if they repeatedly violate terms of the agreement. Yet these sales candidates are still intellectually excited, embrace our unique recruiting methods and are hired by the brand. Unfortunately, many just can’t adapt our foreign selling process and fail. This has created a shrinking talent pool in our industry.

Second Challenge: Can You Afford Mediocrity?

Middle-of the-road sales people can be the Achilles heel of strong sales growth. Many left our industry during the Great Recession, but there are still those who slipped under the radar due to their longevity and loyalty to their brand and their team. Recognizing their contributions, smart CEOs transitioned them to new responsibilities within their organizations. Unfortunately this isn’t always the case. As the CDO of several brands, I was strapped twice with the expensive joy of managing underperformers, when the CEO refused to move them out of sales to other positions. I’m sure some of you reading this have suffered the same loyalty versus performance fate. In today’s market, the cost of losing quality franchise buyers is not an option.  

Why Old Guys Still Rule

The average age of the 41 top performing franchise sales pros was 53. Baby boomers grew up in a generation requiring fast follow-up; social skills; answering and immediately returning phone calls; dialing for dollars; overcoming objections; establishing credibility, confidence and trust with buyers; and effectively closing deals. Don’t get me wrong; there certainly are top franchise performers from more recent generations, but certainly in less abundance which has strained our talent pool.

Surprising Survey Research Results

To understand the makeup of a great sales person we asked our development pros to participate in Rebecca Monet’s Zoracle’s SpotOn! meta-analysis assessment, which collected data revealing performance correlations and deviations among sales people. Initially seeming counter-intuitive, upon closer examination the results clearly quantified what other singular studies have missed. Monet, founder of Zoracle, has administered more than 80,000 assessments within the franchise community. The following provides some results revealing the traits, characteristics, value systems and “DNA” of successful sales people representing different brand categories.

Selling Food vs. Service

Sales pros who sold food concepts only during their careers scored 15.3 percent higher in the executive management category than those who sold service concepts only. These sales pros know how to deal with many moving parts, guiding their franchise prospects through complexities of higher costs, main street site locations, and often larger employee staffing and management responsibilities that service brands don’t require.

On the other hand, those who sold only service concepts scored 21 percent higher in marketing skills. They understand the value of attracting, selling to and retaining franchisees. They always have their fingers on the pulse of the market and are the first to adjust their business development strategies to accommodate market changes.

Selling Retail vs. Non-Retail

Non-Retail sales pros outscored those selling retail concepts in all Emotional and Social Intelligence (soft skills) markers including self-management and relationship management. Individuals with a high degree of self-management build trust through being authentic and reliable. They admit their mistakes and are not prisoners of their emotions. They are optimistic, upbeat and enthusiastic. They are skilled at being able to work with others. They handle difficult people and tense situations with diplomacy.

On the other hand, sales pros who sold retail concepts possess greater hard skills including technical and operational skills. It seems that no matter what business, product or environment, they have the knowledge and operational capabilities to run the business. Not surprisingly, 17 of the 41 sales pros were franchisees themselves at some point in their careers. When you’ve walked in the shoes of a franchisee operator, it provides deeper perspective and insights buyers truly appreciate.

Selling Single-Unit vs. Multi-unit

The biggest difference between those who sold single-unit deals versus those who sold multi-unit deals was in the values and motives of the sales person. Sales professionals who scored high in values such as recognition, prestige, challenge, instant gratification and competitiveness (Emulator values) leaned heavily towards selling single-units. Sales professionals with Emulator values are likely drawn to the single-unit sale because the transactions are faster, gaining them recognition as they put numbers on the board.

On the other hand, sales professionals who sold multi-unit concepts scored 13 percent higher as “Belongers.” Belongers value commitment, loyalty, sustainability, team and stability. They are systematic, tenacious and persistent. Because of these values and traits the sales cycle and complexities that can be expected from a multi-unit deal will not deter them.

Overall, the research demonstrates that successful franchise sales professionals possess the ability to accurately detect crucial social networks, read key power relationships and forces that shape the actions and decisions of others — attributes leading to closing more deals. The survey findings also substantiate that top performing sales professionals are not necessarily politically correct or even sensitive to others. However, it’s evident they excel at managing relationships, and themselves.

In my experience, one of the biggest challenges franchisors face is spending time and money developing a franchise sales person who is not a good fit or is a subpar performer. This in-depth study uncovers critical factors affecting franchise sales performance, and proved eye-opening. For a free summary of this research, contact me. The complete Franchise Sales Masters study will be available in December. We hope you take advantage, as it should help your hiring and training performance. n

Steve Olson, CFE, Olson and Associates, is a 30-year veteran of franchise development and author. Find him at