You’ll improve the number of individual candidates signing franchise agreements over the next 6 months by up to 30 percent doing a better job with funding, real estate, and territory analysis in the middle of your brand’s discovery process.
Here are three action items for recruiters to take with candidates:
- Know the total dollar amount needed to properly capitalize the business. Take the amount in Item 7 of your FDD and add 6 to 36 months (depending on the brand and industry) of personal income requirements. This is not the same as business working capital. Household income replacement is top of mind for almost every candidate, and most recruiters are not discussing it. Do the work with them and get this amount down on paper!
- Have clarity and proof on how the amount from #1 will be funded. If it’s SBA, conventional, letter of credit, or home equity, get a pre-qualification letter. For a rollover, have them connect with one of the rollover firms for proof that the funds are there and that the rollover qualifies. If self-funded, you want copies or screen shots of the accounts and funds. If a family member, friend, or partner is the solution, have that person complete your application and show evidence of access to capital.
- Provide the candidate with a real estate and/or territory checklist with action items. This can be a simple PDF explaining what the candidate will do and learn about in their area. Done right, a candidate will love this. It will be fun! They’ll start to <“see”> themselves in business with your brand in their own backyard. I’m not suggesting they start working with the real estate team doing site selection and lease negotiation. Those are action items for a franchisee.
Why it works
In the early part of the recruitment process, which I call the Vision Phase, a good recruiter gets crystal clear about a candidate’s goals and life vision, experience, timeline, current financial situation, and decision criteria. A good recruiter helps a candidate understand the business model, industry, unit economics, and traits of top-performing franchisees. At this point, a candidate should feel inspired and excited about the idea that maybe their dreams have a chance of becoming a reality with your brand. They’re starting to “see it.”
So, what’s next? Discovery day? Wrong! Focus on funding, real estate, and territory analysis before a candidate visits the home office to meet with the support team and executives. This middle phase, focused on funding, real estate, and territory analysis is what I call the Grind Phase. This is where a candidate starts to–in a practical and realistic way–connect the dots and color in the picture that was created in the Vision Phase. It’s beautiful to see it happen for a candidate.
Consider the three action items above and what you could start doing right now. It could mean up to a 30 percent improvement in signings with stronger, better, and more prepared new franchisees for the support team.
Let’s go to work!