Show season is now over; your stand is back in storage and the blisters have healed. You’ve sent all your follow up emails and thanked everyone on the socials it feels good, and hey – you must be doing something right, look at all the enquiries you had from the last show! Some you’ll have spoken with prior to the event, some you’ll have had meetings scheduled, others just wandered on to the stand and feel as though there’s potential, but, and it’s a big but, in all of those conversations, did you actually determine the barriers that could potentially stop you from getting down to the nitty gritty? It may be a surprise to you, but most don’t!
Let’s face it, the shows help us out a bit as in you can spot a tyre-kicker from a mile away – True? You know the ones; they profess their love for your brand whilst filling their boots with your Lindor chocolates. But then there are the other tyre-kickers…they’ve done their research, they know your brand, they’ve downloaded the franchisee brochure in preparation to meeting you and they’re apparently “good to go”, what they’ve failed to mention is that they don’t have a UK Visa or their credit status has more red crosses against it than the latest series of X-Factor. Do you know what capital they have available, and where from? And, is it currently available? Without this information, how do you determine the difference between this prospective franchisee and the one sat next to them? They’re both seemingly a good fit, they’re saying everything you want to hear, but only one of them will get the funding to turn their dream into a reality…and you’ve done twice the work!
We know that it doesn’t feel right to expect the worst, in fact, it feels very negative indeed and if we felt like that about all our prospective franchisees, we’d be crying into our chocolate balls.
Let’s make sure everyone starts as they mean to go on…be assertive by asking the difficult but vital questions. If you don’t feel comfortable asking in person, incorporate them into your Franchise Application form but whatever you do, don’t leave this until the point where the franchisee is seeking funding as you may find a very big spanner has brought the entire process to an abrupt stop, all at the privilege of your time and money.
So, tread carefully; The earlier in the process this information is disclosed avoids disappointment for both Franchisor and Franchisee and filters out any tyre-kickers
Needless to say that pre-qualifying is just as beneficial for the franchisee as it is the franchisor; since the costs of investing in a franchise business vary so greatly, individuals may not be able to afford certain brands and knowing in advance how much the franchisee would qualify for, so that they have a better idea of which brands they can access or not, will help speed up the purchase process and no one is left worrying about funding delays.
We strongly advise that you suggest to your prospective Franchisee that they speak with a Franchise Accountant in advance of your initial meeting, as a franchise Accountant will know the marketplace and have likely worked with the brand before. They will also work to understand the credit profile of your prospective franchisee so things can get moving, fast. They’re already expert at assisting with Business Plans and Lender Applications, improving the chances of securing funding.
Ok, so Business Plans aren’t exactly the sexiest topic of conversation when franchisees are looking for a brand to invest in, but they are crucial to a successful business. Franchisees don’t necessarily realise the importance of a good Business Plan when approaching a Franchisor so don’t be afraid to tell them!
Partnering with a firm of qualified specialist franchise accountants who work with a wide range of high street banks and lenders takes the pressure off as they have the right tools to source various funding solutions. They know what the banks want and what they don’t, keeping your franchise network funded and moving in the right direction.
d&t Business Plans are bank-recommended, created in-house (so no third party fees) and using a firm of award-winning Franchise Accountants and Franchise Brokers such as d&t will not only save you time and money, it will give you complete peace of mind, so next time you’re onboarding your next franchisee, remember to ask those important questions and remember to recommend a qualified Franchise Accountant…You bring the franchisees, we’ll bring the chocolates!
(and your next tyre-kicker, well, tell them to burn rubber!)