This month, I will explore an issue that can impact franchise sales success.

In my October and November posts, I pointed out there are three choices regarding the entity responsible for your franchise sales, specifically:

  • Having the owners of the franchise company fill the role of franchise sales
  • Hiring an in-house franchise sales person as an employee
  • Utilizing an outside franchise sales person or franchise broker

If the franchisor’s owners or managers do not want to perform franchise sales and do not wish to retain a franchise broker, the remaining choice is to rely upon an in-house franchise sales person. The following are the pluses and minuses of this approach.

In-House Franchise Sales Pros/Cons

Here are some of the reasons to use an in-house franchise sales person:

  • Hiring an in-house franchise sales person gives you more control over the sales process. You will be able to go to your sales person at any time to learn the status of each prospective franchisee.
  • An in-house franchise sales person will be committed to selling your franchises full time. Most outside franchise sales professionals represent a number of franchisors.
  • Employing an in-house franchise sales person allows you to build the compensation package to encourage both the quantity and the quality of the franchise sales, thereby resulting in more qualified franchisees.

The following are some of the reasons against hiring an inside franchise sales person at the outset:

  • Many new franchisors plan only a few franchise sales the first year. This approach allows them to learn how to be franchisors before they get in too deep. The expense of an in-house franchise sales person may not be justified for only a few franchises.
  • As a new franchisor, typically few dollars are generated until a franchise is sold. It can be difficult for the new company to afford the compensation package for a seasoned franchise sales person.
  • Having an in-house franchise sales person may generate too many franchise sales, exceeding the new franchisor’s ability to service those franchisees. This shortcoming may lead to poor franchisee relations, possible lawsuits and fewer franchises sold overall.

If you would like to speak with one of our franchise consultants today, please don’t hesitate to call (706) 356-5637!