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Nothin’ But Net

Franchisors have five minutes to sell themselves to brokers


Sure, some people get 15 minutes of fame, but only five minutes to sell a concept to a FranNet consultant.

It seems like it should have been the other way around: franchise brokers courting franchisors. But instead, franchisors from large to small companies were “auditioning” in front of a panel of brokers who then will hopefully beef up their recommendations of the franchisor’s concept to candidates in the Franchise Network Group’s program.

In the past, franchise reps have been known to sing, perform skits, raffle off expensive grills or just expand on their one-minute elevator speeches in order to sell the FranNet brokers, who are also franchisees, on their concept. FranNet hosts two such conferences a year, which provide brokers and franchise salespeople a venue in which to get to know each other. The spring event was held at the Hyatt Regency Pier Sixty-Six in Ft. Lauderdale, April 8-9.

Is it worth it for a franchisor already accepted into the network? Consider this: The Cleaning Authority pays FranNet consultants $40,000 per lead, and have sold 98 percent of its 184 units through brokers. Half their franchisees have master’s degrees, because FranNet understands they aren’t recommending a cleaning job, but rather a “staffing business,” according to Tim Evanikovich, president of the East Coast-based franchise.

Kris Nieb, senior vice president of Elements Therapeutic Massage, said they paid about $1.6 million in commissions last year “just to this group.” “And happy to do it,” he added, grinning. Attending the meeting is so vital to a company’s growth, that Elements’ parent company’s CEO Jeff Jervik attended the meeting with his inside sales team to pitch their story.

One more story: Ken Kindt of Sign World with 270 units, receives 60 to 70 percent of his franchisee leads from FranNet. “I might do one Internet deal a year,” he said.

FranNet was founded in 1987 to counsel prospects on which of the 3,000 or so franchise opportunities out there might be the right fit for their talents and resources. Consultants/brokers give proprietary tests and counsel the prospects on the business model and the industry — they don’t close the deal. That’s up to the franchisor’s inhouse team, or in some cases a third-party closer.

The consultants we talked to said they aren’t swayed by the fact that some systems are offering higher commissions than others. As local business people tapping into their networks over and over, they can’t afford to alienate their community by mismatching business people to business opportunities.

Jack Armstrong, the system’s principal owner, as well as its largest and most successful franchisee, brought on Jania Bailey to run the franchise when he and three partners bought it from the founder. He gives Bailey high marks for her high-energy leadership, which sets the stage for an enthusiastic group of franchisees. An award ceremony one evening was akin to winning best picture at the Oscars for this competitive, yet collegial, group.

When franchisors weren’t giving their five-minute sales pitch (each one did it about four times), they could attend sessions on using 401(k) programs to finance a franchisee’s unit, how to make the most of your financial performance representation and how to attract the media’s attention (full disclosure, that last session was given by Franchise Times and attorney Lane Fisher).

The event serves as a homecoming of sorts. As one franchisor salesperson said about his peers who often move around between concepts: “Same people, different shirts.”

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