It is common for franchisors to want the “secret formula” for franchise sales. The truth is, there is none. Still, you may wonder how your own franchise sales process aligns with or diverts from the typical sales cycle. You may ask yourself, “Am I moving prospects along too quickly or too slowly? Is my cost-per-lead reasonable? How long should it take for a franchise lead to become a sale?”
Allow the experts at our franchise sales company to put the process into perspective.
The average franchise sales cycle is 12 to 20 weeks
On average, the total time to close a franchise sale can be up to 20 weeks. This multi-faceted process includes sending marketing materials, qualifying a lead, scheduling initial and follow-up meetings, hosting a prospect for a Discovery Day, securing financing and more. The franchisor-franchisee relationship requires a long-term commitment, so it is important that franchisors do not rush the process of finding the right candidate. A franchise sale is more than a business transaction; it is the beginning of a partnership. Franchisors must only award franchises to candidates who have been properly vetted for their investment, experience and enthusiasm.
A sound franchise marketing budget and plan can make a difference
The franchise sales process is truly a numbers game. The more leads you generate, the greater your chances of selling a franchise. According to various franchise resources, the average cost-per-sale is $7,558 and the average cost-per-lead is $109. However, your cost-per-lead can vary depending on the type of media used. Leads generated through public relations, print advertising and franchise trade shows can be more costly, while franchise brokers and Internet leads are on the lower end of the cost spectrum. Close rates will also vary based on the lead source, so all factors must be given proper weight in order to create the most efficient and cost-effective franchise marketing budget.
Determine how aggressive your franchise growth strategy must be
If franchisors desire to sell quickly, they must employ a lead generation strategy that is just as aggressive. For instance, while direct advertising efforts such as pay-per-click and social media advertising campaigns directly attract qualified leads, a tactic like public relations serves as more of an influencer — building the third-party credibility franchise prospects seek. Less aggressive goals, on the other hand, may dictate a laser focus on lead generation, leaving the “influencers” for a later point in time. With this in mind, franchisors need to create a marketing mix that suits their growth goals and balances their efforts.
Your franchise sales technique matters
The overall expected close rate for a franchise sales program is only about 2%, which means that much of the process will depend on the abilities of you or your franchise sales team. Establish a process that includes following up with franchise sales leads, addressing objections and thoroughly qualifying prospects. Whether you avail yourself of sales process consulting services or you spearhead your own efforts, a sound technique can boost your chances of meeting your franchise sales goals.
Convert leads to franchise sales with our sales process consulting services
The time it takes for a franchise lead to convert to a franchise sale varies depending on each franchisor’s concept, sales technique, marketing strategy and more. Let Franchise Dynamics’ team of seasoned franchise sales and development professionals provide your organization with a full-service growth solution uniquely tailored to meet your goals. Contact us to learn more about our franchise sales services.
Annual Franchise Development Report from Franchise Update, 2017.