The Trap that Leads to Franchisor Failure

Episode Transcript
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Lance Hood (FranPro) (00:00):
Hi everyone, I would like to
welcome you to the call.
Today we have Chris Neib, thepresident of Franchise Evolution
Partners.
Chris, welcome.

Kris Nieb (Fran EP) (00:09):
Thank you so much for having me Good
afternoon.

Well, chris, I would love to
transition to some insights,maybe even some action items,
and just get your wisdom in thefranchise industry.
But before we start, let's justtake a second and explain what
your company does for franchiseowners.

Absolutely so.
When we started the companyback in 2019, our goal was to
come in and acquire franchiseowners.
We are part of a family officebased here in Denver, colorado,
and that was 100% the goal.
We were going to acquirecompanies, help them grow and
then flip them.
We've just seen it be supersuccessful in franchising, as

(00:47):
all of us have, and so it was anopportunity for us that we
wanted to go after.
And what happened is, as westarted going down that process,
we just had numbers that didn'tmatch up, companies that
weren't the right fit.
They would find out who ourinvestors were and they'd want a
bigger number, which everyfounder has every right to want
and go after.
And we decided to go ahead andreverse engineer this and go

(01:08):
ahead and come in and sell for abrand first and foremost, and
then turn around and then lookfor investment opportunities.
So we're in the franchise salesorganization space, but we use
sales as an opportunity to goahead and look for investments
into franchise owners.

Right, which is very smart, because
then you get to know everythingyou need to know about them, and
you actually you know what it'slike versus what you're being
told it's like.

You see if they pay their bills on time,
you see if they're franchiseeslike them, you see if they've
got good validation, badvalidation, you see how their
team interacts with things.
And so you're right, we see itall.
It's fun to be able to go thatpath, first and foremost, but
you know, we could have a brandfor three months and say these
guys got it.
We could have a brand for threeyears and say, gosh, we got to
figure out to put some moneybehind some of these guys,

(01:57):
because some companies want tohave that opportunity and a lot
don't, which is good.
And you know they've got everyright to kind of decide how they
want to grow their business,which is great.

Well, knowing that we're having a
conversation around that isgoing to be listened to by
franchisee or maybe somefranchisees or other people, but
what do you think is the mostimportant thing we could talk
about today?

You know, I think the biggest one that we
see a lot of is processes.
Do they have a process and thatcan be a sales process or
education process you don't wantto say the word sales process a
process to support theirfranchisees as they build and
grow their business, and then,ultimately, what an exit could
look like, and that could be onthe franchise or side or the
franchisee side.
So the one thing we really diginto up front is what are your

(02:45):
processes?
How are you going to supportyour franchisees, get them open
and then, more importantly, makesure that they're successful.
You want to make sure theseguys are making money and that,
at the end of the day, happyfranchisees cures everything,
and so sales takes care ofitself.
Operation takes care of itselfthen, and then ultimately
they're profitable, which thenhelps for what an exit process

(03:05):
could look like for a franchise,or if that's what they're
looking for.

Yeah, well , if they don't have good
processes, then it almost seemslike the way to keep funded is
to sell more franchisees, whichexacerbates the process, the
problems, when really yourcustomer is the existing
franchisee, not the nextfranchisee.
That will actually make thingsjust roll smoother.

And we see that right.
I mean you just paid a bunch ofmoney for an FDD, just paid a
bunch of money for a new fancywebsite and you hope you've got
nice pictures and videos.
But if it's about that nextfranchisee that comes in to keep
the lights on, well, what aboutthe guy who just gave you a
check a week ago or a month agoor a year ago?
Are they building a bigbusiness?
Are you supporting them?
And you hate to admit it.

(03:50):
We've seen it all.
We've seen it to where it'sgosh.
If you can fog up a mirror andwrite a check, you're a
franchisee and that's hard notto take when you're a new
franchise or because you justwant to grow and you don't know
what you don't know yet.
And what we tend to see isthose first call it 10 to 15
franchisees.
They're buying into you,they're buying your vision,
they're buying what your goalswere to grow this business.

(04:11):
They may not be the right fitand that's hard to say no
upfront, but sometimes saying noupfront is better in the long
run.

What do you see as the kind of growth
milestones in number of units,like 10 units, 20 units, like?
How do you break it down?

The royalty .
Sufficiency is always the goalright?
How much do we need to bring inroyalties?
We're paying all of our billsand, based on the industry and
based on what an average unitvolume could look like, or just
go right to what a royaltypayment could come in how many
locations do you have to get towhere all your bills are paid?
You've seen that number, basedon industry, anywhere from 70 to

(04:50):
100 franchisees.
So you're going to run it leanand mean for the first 20 that
you sell.
So then that means that you'recooked, lined, bottle, washer,
all the above and you're doingall the work to help those
franchisees get their businessesopen.
So it's bringing on franchiseesto get to 20.
And then from 20 to typicallyup to 40 or 50, that's where
you're hiring a bigger team.

(05:11):
You might have a VP ofoperations, a VP of support, you
might have a new CFO in place.
So I kind of look at it as inthe first, 20 becomes typically
the founder doing everythingthey can do to slowly start to
build their team.
20 to 50, you're hiring a bunchof people to support those
franchisees and then 50 plus iswhere you have a pretty decent
size team in place becauseyou're getting to the promised

(05:32):
lands, of getting to that 70 to100 that are typically what
you're looking for to get opened.

Have you noticed, like I've seen, what do
you think it is?
Around 20% of people have anitem 19?
.

For seeing that more I get nervous.
If they don't, I think that youshould.
If you don't, I wonder why youdon't, why you're hiding your
numbers.
That's the scary part.

That's the big concern, because people
buying into a business, I meanthey're trying to get a return
and for some of them, likethat's their life savings.
And if they're jumping into itlike it's sink or swim, and so
not having numbers and beingtold to just validate with
franchisees, my first reactionis, if the numbers were better,

(06:19):
they would proudly wear them onan item 19.
If the numbers are mediocre,they might be hiding them and
then they'll say well, my lawyersays we shouldn't and it's like
what's your thoughts on allthat?

I think that you've proven out a
business model and you've goneahead and made an investment
into a disclosure document.
I would tend to think that ifyour numbers were good and
someone's going to bind to yourbusiness, you should show them
what they can potentially make.
And there's so many differentways to do an item 19.
You could show top line revenue.
You could work way down and goall the way down the bottom line
revenue.
You could get very creativewith the P&L to say here's the

(06:55):
major expenses minus thesedifferent expenses.
So I don't disagree.
I think that if they're notwilling to put an item 19 in
place, it makes you a littlenervous when you're looking at a
brand Because, let's say theyhave one franchisee or they
don't have any franchisees, howare they going to know how to
build and grow their business?
And go back to the foodmentality Did they get on an
airplane?
They tasted the food and theysaw a bunch of customers and

(07:16):
they had a gut feeling that thiscould work well.
Well, sure, but does a gutfeeling pay your bills?
So I get a little anxious whenthey do not have an item 19.
I understand why somefranchisors would not, but it's
hard to go find franchisees forsomebody who doesn't know how
much money can you make in abusiness.

I've even seen them use corporate location
and then back out the estimatedroyalties based upon that as an
example just showing corporateinformation.
I mean yeah.

It's hard with attorneys too right,
because they're really smart atwhat they do.
We all need them for all theright reasons.
But when somebody says, don'tput an item 19 together, well,
they've got a track record.
I mean, go back to the Koreanbarbecue concept that you and I
have talked about in the pastgreat corporate facilities,
great numbers.
And we literally had to do that.
We said here's corporatenumbers and let's minus out

(08:09):
royalties, ad fees, et cetera,et cetera, just so somebody can
see what that ultimately lookslike.
And the return is still amazing.
So to me you kind of questionthough well, why isn't there an
item 19?
Does that raise a red flag?
Because sometimes it can.
And so you start to identifywhat's the best way for somebody
to learn those numbers.
And building proformas isdangerous.
I mean, there's a lot oflawsuits out there right now for

(08:31):
people who are buildingproformas without an item 19 or
even against the item 19.
So you've got to be a littlecautious in how you do it to
make sure it's the right fit.
But more importantly, you'vegot to understand why aren't
they giving you the informationand helping make an informed
decision?

One of the big things that people have
trouble with.
When I ask aboutdifferentiation and being unique
, there's got to be somethingthat just lets people know how
you're different, so that ifthere's lots of people doing the
same thing, they can tell.
Or something that's so novelthat it just draws people to you
.
What do you think it is if youwere to describe what it is that

(09:06):
makes a company stand out orunique, versus just saying
they're unique?

Well, go to the end user, the customer, the
customer of that franchisee,right.
So when you have a franchisorthat literally almost teaches
their franchisees that thecustomer I hate to say the
customer is always right becausewe know that's not the case,
but they almost treat thatfranchisee as though they're the
customer and then thefranchisee can focus on their

(09:31):
end user.
Their customer.
Customers are what's going todrive revenue.
That customer experience iswhat's going to drive revenue.
So the franchisee are reallyfocusing on that customer
experience.
We could use frozen yogurt as anexample.
How many frozen yogurt placespopped up and then went away and
, as bad as this sounds, wasthat vanilla really different
than the same gummy bear thatwas on top of a different cup?
Probably not.

(09:52):
But if they had a greatcustomer experience, that's what
kept people coming back moreand more and more again.
You see the same thing withrestaurants.
What's that customer experience?
Look like Gyms.
How's that fitness conceptworking?
Fair end retail if it's a swimschool or a slunk concept, like
with Slons by JC, what makesthem different than all the
other brands that are out there?
And it's ultimately thatcustomer end customer experience

(10:13):
who's the one hand in cash overa credit card that the
franchisee are that focus onwhat that experience is, are the
ones that are growing biggerbusinesses faster.

Yeah, and if you're just in business, but
it really isn't, that you're notable to differentiate or it
doesn't seem to stand out orhold your attention much, it
doesn't have the customer grab,which isn't going to help the
franchisee it's not I mean goback to that.

I mean it's all about that customer
experience and the need for themcoming back.
I mean tree business my treecould fall down but I need
another tree, and then was ithard to get an arborist or a
company over to do it, becauseif I'm not getting something,
I'm going to the next one orthen the next one, and then the
next one.
So if there's a good customerexperience, I think all of us
follow that and we can go pastCOVID and what we all went

(10:59):
through there.
But I think the customerexperience is so incredibly
important right now and ifthey're willing to give you more
and more of their cash or theircredit cards, that's what
you're looking for.

Yeah, that was the same thing.
I first learned about Slons byJC.
I was just like, so what'sunique about this company?
And as I went through it Ireally learned how it was
different and it was veryimpressed by it and I've
definitely done quite a fewterritory checks on that
specific brand over the yearsjust because it's.

(11:31):
I mean, the history and thenumbers, the financials are
incredible, but also how theyrun, the business model is just
different.

It really isn't.
They had that concierge sittingat the front, so the franchisee
is not there.
They don't want them there.
Right, just built a greatthey've got.
Go back to processes.
They've got great processes toidentify franchisee, great
processes to get open and greatprocesses to post-opening to
fill a location.
So they've done a very good jobat making sure, ultimately,
their customer, their franchisee, is making money and then their

(12:02):
customer for the franchisee isthat the individual's renting
space are busy month over monthover month so they can continue
to pay the rent payments.
So they've done a really goodjob with their business model.

When I see a bunch of young brands, I
usually have to warn people okay, listen, if you're talking with
a young brand, they don't havethe structure in place, so
they're probably just going towant to get on the phone and
talk to you and then say soundgood, here's an FDD, let's talk
in a couple of weeks.
But when you talk with anestablished brand, they're going
to have an organized salesprocess that might have some

(12:36):
webinars, economics calls,training calls.
They'll have where they want tomeet you, what's kind of what
you consider an effectiveprocess, so that people can get
an idea of what that would looklike.

I think you got to go into what we've seen.
I'll keep comparing a youngrestaurant concept for an
all-you-save splash as anexample a very established brand
.
So with the younger concept wedo build a lot of processes in
place to teach people about theconcept, about their real estate
, about their food, about whatit's going to be like to operate
a business.
But to that point, when we havea discovery date, it's okay.
Time to taste the food, let'ssee what the experience is like,

(13:12):
let's see if people areactually coming and going from
the restaurant or restaurants,which is very helpful.
But you've also still got tobuild a business because even
though we have awarded a bunchof franchises, they're all in
construction, so there's notgoing to be a lot of validation.
So what we've been able to dowith that founder who loves to
be on an airplane is he'll go onan airplane and go meet with a
candidate.
So he's going to take that stepto go ahead and go out there

(13:34):
and meet people in their market,potentially look at different
areas and different sites, whichis a big time commitment.
But he's trying to find thoseright franchisees, which most
franchisors at young stages willnot do, whereas we flip that
coin over, swing that pencilmodel.
The other side, safe splash.
Very well established.
We had a discovered dateliterally yesterday with and

(13:56):
every department service andbooking and real estate and
construction and ongoing supportand marketing.
They have a bigger team andthat's just because they've been
around longer and they just hada more defined sales process in
place to identify if it's theright fit for someone to buy
into their business or not.
So you'll see it all over theboard.
You'll see franchisors that areyoung, that are just will do

(14:17):
what it takes to get on anairplane and go make it happen,
whereas with more establishedbrands, they'll have more
department heads as part of adiscovery process because they
can.
Yeah.

And I've seen like if you have more leads
or more opportunities, you cando more marketing, but when you
have less, you really have toswitch to sales.
And what you're saying is is,you know, with that younger
brand, he's willing to step outand meet face to face, he's
qualifying them.
But also, I mean, if you'remeeting the founder of the
company face to face, that'spretty easy, that's pretty

(14:49):
entice.
I just think that that wouldthat would get your attention
you know it shows you acommitment.

I mean he's .
He's on the food network.
All the time.
We joke around about how we cantell when there's a rerun on
diners, diet and dives, driedand dyes, whatever it's called,
and all of a sudden you'll see alarge amount of people come
through because they're veryinterested in the concept.
It doesn't mean they all becomeowners, because that's
absolutely not the case, but hewants us to build the foundation

(15:15):
of franchisees and so sometimesit takes a little bit more time
, a little bit more money to doit.
But if a founder is willing todo that for you up front and
then ultimately continue to comeinto the field or go into the
field from his team as he's beengrowing it, it just shows you
commitment.
It really does, because heneeds it to work.
I mean, that's a big piece fora younger brand.
Do what it takes to make itwork.

Right, what do you think like for lead
sources for companies, Becausethat's going to change.
Do you use, like you know look,you know you're talking to
people differently or sourcingpeople differently, depending on
brands?
Like how do people determinewhat would be the right place to
find the candidates for theirkind of company?

So it's a budget response, right.
And so the InternationalFranchise Association right now
says it typically costs anywherefrom $8,000 to $12,000 to
acquire one franchisee.
Now you're seeing that numbergo up just because people are
spending a little bit more moneyor people are becoming a little
bit more sophisticated and thenumber of buyers A little bit

(16:18):
harder to find right now.
So that might go 12 to $15,000.
So if you're looking for one amonth, let's go to the high side
plan on spending $15,000 amonth in marketing.
That can be social media, whichis big, linkedin, which is big,
google, which is big.
But you're competing with a lotof franchisors, a lot of
franchise consulting groups thatare out there looking for the

(16:38):
same type of candidate toidentify, helping them find a
business and then ultimatelywork with franchise consulting
groups, right.
I mean you can't just say Iwant to work with you and then
here's, you know, but here's acontract and we're going to go.
They've got to be the right,fit, right and you've got to be
validation from your side.
Ultimately work with franchisee, or so it's one of those.
It's expensive to build andgrow, but you've got to

(16:59):
anticipate being able to spendsome money to get there and
ultimately you can sell tofriends and family all day long.
But sooner or later you've gotto start, you know, putting some
money behind this, to grow yourbusiness faster, to acquire
franchisees, because you can doboth.
You can work organically onyour own with different
marketing tools or you can workwith franchise consulting groups
.
We have brands that do bothbecause they want franchisees

(17:20):
open, so they're willing to dothose things.

What do you think is the minimum amount
of capital that somebody needsto have on hand when they're
like?
You know what I want to convertthis concept I have into a
franchise, because I think thata lot of people come in either a
little underpreparedfinancially they have higher
expectations or they investtheir money incorrectly in the
beginning and they runthemselves dry.

That's.
That tends to be the worst partof our industry and let's just
call it for what it is.
Somebody comes inundercapitalized or you hate
this, and it's happened to allof us where you hire the wrong
people and they're just reallyexpensive and they don't deliver
the results you're looking for.
So we go back to if a type ofnumbers and some of the things
that we all continue to hearabout.
If you're not anticipatingbetween four to $500,000 to

(18:08):
launch your brand, it's going tobe tough.
I mean, we average FDV rightnow is between $35,000 and
$50,000 with an attorney.
Can it be lower or higher?
Yeah, operations manuals, youknow, putting the right
marketing in place, rightsystems in place and having
capital available to you.
Can you do it for $200,000,$250,000, you can, but you're

(18:28):
really bootstrapping yourself.
So a lot of what we look intowhen we talk to these younger
brands is do you have thetimeframe and the appetite and
the capacity slash capital tospend to get to that point?
So I tell people $400,000 to$500,000.
And can that be scary?
Absolutely it is and it can be.
And it's making sure thatthey're in position to be

(18:49):
successful.
Build established, good, solidbrand of support franchisees.

Right, and it's going to be.
If you're trying to get it onthat younger, that smaller
number, then you should probablyplan that you're going to have
what do you say?
Your concept has to be reallyunique and really have gravity
that pulls people to it.
Because if you don't reallyhave that differentiator, that
where people are drawn to wantto buy and own a franchise and

(19:19):
drawn to want to do business atthe franchise locations, you're
just going to be slugging moremarketing to try to get it off
the ground.

I mean, that's really it.
So go back to selling afranchise to pay your bills,
selling your franchise to get tothat next one, to get to the
next one, to get the next one.
It's a successful model.
Does it work that way?
Yes, but do you make somedecisions and support decisions
based on trying to get thatfranchise fee, and you will.
And so we've seen lots offranchise orders do it that way

(19:49):
and become successful.
But the ones that can take adeep breath and make the right
decisions up front to turnsomebody down if they're not the
right fit, it's going to happenthat way.
We all like to tell funnystories.
We had a discovery day twoweeks ago with a cream concept
that we work with and husbandwas 100% all in.
The wife was falling asleep andthe boardroom like literally

(20:13):
falling asleep, and it was oneof those.
Well, you could sell afranchise.
And Joe was able to come backand say why would I sell a
franchise to a family where thewife is literally falling asleep
multiple times duringpresentations with our team?
That's embarrassing, and so weultimately turned down the deal,
which was a smart move on hispart.
And could he use anotherfranchise or franchisee as a

(20:35):
young franchise, or sure hecould have, but to be able to
make those calls up front, andit's a story that we're all
laugh about forever, like goshremember when that lady fell
asleep in a discovery day it'skind of a fun one, but it
happened and he was able to makethe decision on.
I don't want them as ranchiseseand nobody from our team could
have predicted that.
Right, I mean, it was just oneof those things that happens.

So I know there are certain situations
where I bring in some espressoswith me.

Yeah, I'm going to have to sit.
I literally just shook my head.
It was like, you know, we see alot in franchising and that was
definitely a first, hopefully alast right.
But I mean, I was more and thisis fun to say I was proud of
him to not just say go ahead andsell my franchise.
It was like, ah, we're probablynot the right fit.
And then it's that you knowfear of loss.

(21:24):
Well, why can't I have this?
Well, your wife was sleepingand you kept waking her up.
Like how are we going to letyou guys invest, you know, a
bunch of money into a businessif she doesn't even want to be
here?

So you're going to be on your own.
You know, that's just sayinghe's going to be on his own.
You know for sure, absolutely.
What are a few things that youthink really choke?
Brands, productivity you knowwe're trying to get this
business off the ground and youhave the whole process you know
of either.
You have the sales process, butyou also have the training

(21:55):
process and then, once they'reopen, that additional support.
But there's some, maybe somechoke points that people don't
realize that they need toprepare for.

So I think the key in all three of those
buckets would be marketing.
If they're not willing to spendmoney on marketing to identify
franchisees in whatever capacity, that's going to be tough.
If they're not willing to spendmoney on marketing, ultimately
get these guys open for grandopening campaigns, how are they
going to find customers Postopening if they're not willing
to spend money?
Franchisee is not willing tospend money to bring in

(22:24):
customers.
That's always an issue.
So there was an old saying backin the day when businesses were
failing and it could be a gymas a great example.
Well, what are you doing formarketing?
Well, the first thing peopletend to tend to cut out is their
marketing.
Well, we've got customers here,let's just do we can to keep
them happy.
Well, no, you need newcustomers to come in to raise
that bottom line.
So I think marketing falls intoall those buckets that if

(22:46):
they're not willing to spend,they're not going to see
customers.
So that could be againfranchisees, current franchisees
, potential franchisees.
Then, once they're open, theygot to spend.
They got to spend to get thecustomers they really do.

Right and when it comes to somebody who's
looking at it, and engagement,you know, because some people go
dark on you.
They might be good people, theymight have their reasons, but
if you're not able to reach themin a way that connects with
these people, it might be thatthey're not the right person,
but sometimes they are.
What are some things thatyou've found when people are

(23:21):
just kind of like disengaged,because it just shows me that
they're not interested enough ormaybe life got busy, but what
are some engagement things thatyou found that help?

You know.
So I'm a big actions person.
You know they could tell you.
They read it.
They could tell you thatthey're in a good spot.
Their actions are going toteach you everything you need to
know about these people.
So we spent a lot of timebuilding a rapport with
candidates.
We need to know who they are,who their kids are, what life
items could come up and get inthe way of your decision.
And those are hard questionsasked, because if they're seeing

(23:51):
all the right stuff and they'retelling you they're doing all
the right stuff, it's hard tonot think that they're the
greatest people out there.
But they miss a phone call,they don't fill out an NDA, they
don't send an FDD receipt.
Small little pieces in theprocess start showing you are
they engaged or are they not.
And so if you base your processon actions, you're spending
your time on the people thatwant to move forward with things

(24:13):
, and I was trained at a very,very young, early age because I
was not process oriented.
I was probably the worstsalesperson ever to work with
with.

You know, years and years ago because I
would just like oh, they'resaying all the right stuff but
they weren't doing all the rightstuff, and it just helps you
identify.

Spend your time on the people who are
showing you that they'reinterested in, they're showing
you they want to own a businessand potentially your business,
versus the ones who are sayingall the right stuff but they're
not doing all the right stuff.
So it's that get to and know asquickly as you possibly can so
you can focus your efforts onthe individuals that are
starting to say yes and theiractions are going to show you

(24:49):
that in the process itself, yeah, I don't know how many times
I've told people listen, Iappreciate what you're saying,
but I can't hear your wordsthrough your actions.

I said actions mean everything.
You can say anything, butactions is where your head at it
shows what's important to you.

I mean, we see it all the time.
You've seen this a lot.
If people are moving throughthe process and they're doing
what you're asking them to dothey're making the phone calls,
they're on time, they're readyfor you, they're good Whereas we
had this happen with one of oursales directors the other day.
Makes her phone call guy saidall the right stuff, his
financials look great, but hewas running another business and

(25:29):
no, I'm here, I'm here, I'mhere.
But that's not fair.
They're not going to learnabout a business when you're
doing 10 other things and weliterally said close the file,
didn't hear from the guy again,which is fine.
I mean, it's hard every now andthen, but actions are going to
show you exactly how seriousthese guys are about their
business and potential.

Right, and I've had to say that to clients
.
Like you know, listen, you'regoing to be expected, as
somebody who's looking to be abusiness owner, to act like a
business owner, and so you needto be able to show up for
meetings, schedule meetings, beprepared for meetings, respond.
If you're not responding andyou're not following up with

(26:09):
people or you miss meetings, youlook more like an employee that
doesn't have their act togetherthan a business owner, and so
you're going to need to makesure you do that, and I have
those conversations with peopleand then, if I have to follow up
, I'm like hey, looks bad,doesn't look like a business
owner.
I understand you got stuffgoing on, but what happens when

(26:30):
you're in business and thesesame situations happen?

You know it's hard for people.
It's hard people and you knowthere's a lot of people that we
all talk to you that sound great, they look great on paper, but
to that point is it's hard.
I mean, life happens.
We all know that sick I have asick at home today Life happens
right, but it's one of those.
You got to, you got to pushforward in certain areas and
that's what Nintendo switchesand iPads, stuff is for right.

(26:59):
And again life happens andpeople understand that.
Like, hey, I missed, I missedour call.
So you pick up the phone andyou call them, you send a text
message, send an email.
It's too easy to communicatewith people this day and age to
say it's not the right fit or Ididn't get to this.
Let me save you your time andto your point, like you're going

(27:19):
to be looking at this as thoughyou'll be a business owner,
what will you do when yourclients miss an appointment or
they don't show up for something, or something else is missed?
And again it just goes back totheir actions.
Their actions are going toteach you every single thing you
need to know.
So it's time to book adiscovery day if they don't book
a plane ticket, but they'retelling you all the right stuff,
they're still not booking theplane ticket.

(27:41):
Well, what does that tell you?
They're not ready for this orthey're not going to do this.
So you know, again anexperience.
We've all kind of seen a lot ofthings come and go and go up
and down here, but process showsyou everything and then actions
in that process show you whoyou should be spending your time
with.

Yeah, and I found that your volume of lead
flow depends on your motivationto hang on to leads that are
less than stellar.
If you have an abundance ofleads, then you're just like I
don't have time and you focus onwho's moving forward fastest,
and if you have a lack of leads,you're in lead starvation.

(28:18):
Then you do you over follow upwith lesser qualified leads just
because you don't have anythingelse, and so that's something
for people to think about withtheir actions.
Is you know?
Do you have enough leads tofind the right people, or are
you trying to squeeze everybodythrough because you need it to?

happen.
You know, there is an old jokethat you know, if you're lonely,
call a franchise salesperson,they'll talk to you.
It's kind of a funny story, butyou know, even even to that
franchise or that franchisesales individual has a very
small lead pool.
They still have to follow theprocess and you've got to hold
them to that process becausewe've had it happen to us with

(28:55):
this company.
We've had individuals that say,gosh, they're saying all the
right stuff.
We're like, yeah, but they'vemoved a decision date three
different times at their requestand they're still not giving
you a decision.
It's not going anywhere.
Well, I'm still going to call,I'm still going to call, I'm
still going to call.
And you're like, no, they'renot going to, it's not going to
happen.
But they just want to hold on tothat lead because they're
saying all the right stuff.
They're not doing all the rightstuff, right, whereas that busy

(29:15):
person's like, just get them in, get them out, get them in, get
them out.
Let's focus on the ones thatare focused on trying to say yes
right now, which is which isreally good to do, and you've
got to have that mentality ofyou know what.
So and so just miss their phonecall at one PM, I'm on to the
next.
I'm not going to sit here anddwell on it.
I got to focus on movingforward, and I get excited when

(29:36):
people miss phone calls becauseI get an hour back Like this is
great, thank you, never talkingto you again, no problem, I'm on
to the next person or the nextitem that I have on my list,
because, as a as a businessowner, you've got to get to that
next item, and that's typicallywhat happens.

So I have found from interviewing people
since about 2007 that thewealthiest, most successful
people I've ever interviewedthey talk short and they have
less time and they want to getto whatever you need to get to
and then get off the phone ontothe next thing because they have
less time to accomplish whatthey're trying to accomplish.

(30:12):
But the people who hold you onthe phone and won't get off the
phone usually are people who arekind of broke.
They don't have anything goingon and you might potentially be
that lifeline.
They don't know what to do withyou yet, but you might be that
lifeline that might bring themsomething, and so they want to
stay on the phone with you aslong as possible.
And I start getting a littlenervous sometimes.

(30:33):
If someone is just continuouslytalking and they have nothing
going on or they want to callall the time as a client, you
know they just need a buddy.
They're not looking to buy abusiness or they're not looking
to make things happen.
Have you noticed that?

I have.
I mean, our most valuable asseteverybody that we all talk to,
everybody we interact with, isour time, right, our time is our
most valuable asset and you'vegot to spend your time where
you've got actions that areshowing you where to spend your
time right.
And so the ones that are justsaying all the right stuff don't
really have much going forthemselves.

(31:07):
They're not going to buyanything, and that's hard for a
lot of people because, gosh,they filled out an application
form.
They look great on paper.
That doesn't mean anything,right, that just gives you
enough to know if they qualifyfor something.
So, again, with time being ourmost valuable asset, you've got
to spend it where people aregoing to be the most effective
for you and showing you throughtheir actions if they are worth
your time.
And that's hard, it is, butit's something that you kind of

(31:29):
learn over the years that, gosh,they're saying the right stuff,
but these guys are doing theright stuff.
So it just comes back down totheir actions again, because
we've all had them before wherethey say all the right stuff but
they just don't do it.
We've had multi-unit franchiseesthat we've worked with who own
different businesses.
Who I'm doing it, I'm doing it,I'm doing it, but then they
don't.
And then they miss phone callsand you're like gosh, you own 15

(31:52):
, 20 pizza locations and youwant to get out of that.
We're a solution for you, butyou're missing phone calls.
You come to a discovery day,but you're not willing to move
forward on things.
So you kind of just start tosee where do we spend our time
and where do we not.

So it's a big one.
Well, you know thing is we'rerunning out of time for this
call, but I have so many morequestions for you.
I would like to ask you anotherone here, which is what do you
think are the biggest?
Because the responses we'regetting when we're talking to
people and they're intergagingwith us are not engaging with us
and their, their actions don'tmatch their words.

(32:28):
There are some Objections orconcerns that are happening that
are kind of steering them right.
What do you think are some ofthese bigger Unmentioned
concerns that are holding peopleback?
Maybe, especially even ifthey're a valid candidate?
Maybe they're, they're valid,but there's this thing that we
haven't addressed yet and thatwill kind of free people up to

(32:49):
move forward.

There's always going to be outside noise
and I think you have to addressthat up front.
You're gonna have and thinkFerris Bueller, oh, you're
looking at such and suchbusiness from a family member or
a neighbor Gosh, my bestfriend's brother, sister's,
girlfriend's friend that 31flavors passed out.
His dad owned one and he was.
He failed miserably at that.
Well, it's got nothing to dowith what we're talking about

(33:11):
and what this process is right.
So I think people have toaddress outside noise up front
to say let us teach you ourprocess, let us show you who we
are and how we build thebusiness, because people are
gonna tell you this isn't theright fit.
People are gonna say why wouldyou do something like that?
Well, it's not for them, it'sfor you.
And so you've got to identify onthose first few phone Calls

(33:32):
what are their motivations?
Why are we on the phone?
And this is an old sales trick,right, it's, it's a.
How do we Identify somethingfor why they're on the phone
with us?
Is it a bad boss, is it?
They want more vacations, theywant more time with their family
.
So you can kind of come back tohey, Remember when we talked
about this, this was somethingthat can get you back in front
of your family more, get youmore family vacations or get

(33:54):
away from that boss that justtreats you poorly.
So I think you've got to figureout those motivations are and
those first few phone calls orthose first few steps to help
these people know like, hey, I'mlooking at this for a reason,
someone's gonna have somethingto say.
But we more importantly want tomake sure that they make an
informed business decision whichyou can coach them through with
your process to help them getaway from some of that noise,
because it's gonna happen.

(34:14):
It comes up all the time but ifthey're prepared for it up
front, they know it's coming.
So I think that that becomeshelpful.
That oh gosh, lance talked meabout this a month ago and guess
what just happened?
My next door neighbor where Iwas out cutting the grass On
here and it's not a big dealthen because they were prepared

(34:35):
for it.
So I think if you preparepeople up front or here, so
we're gonna understand what thislooks like here.
So your actions during thisprocess are going to show you
for serious or not, and thensome of the anxieties that are
going to come up might changesome of it and they're coached
up front.
It's going to make it that mucheasier.

Right and I have always found that if
people don't have a vision,something that they have an
attachment to, that they're likeI see it, I want it, you know,
then having that disappear andseeing all the fears and other
things, there's nothing holdingthem to it, because they already
have all these worries andconcerns that we all have, but
they have no, nothing thatthey're losing.

(35:12):
It's almost like you knowHanding, you know having, like
this, beautiful meals slid infront of you, and then someone's
like, oh, that's not for you.
And then you're like, oh, Ikind of want this, but but yeah.
Yeah, yeah, exactly.
So it's like you know, if youdon't build that up front in
people, there's nothing thatthey're losing, there's nothing
that's holding them to Doingthis.

(35:34):
It's just, you know, it's easyto walk away because of all the
distractions in the world.
Well, it is Well.
Chris, I appreciate you.
I appreciate everything thatyou shared.
I think everybody listeningappreciates everything that
you've shared today, and I justwant to encourage everybody.
You can go to this linkhttps://Franpro.
vip/GoFranEvolutionPart That'llget you in connection with Chris

(35:55):
.
Again, I can't thank you enough.
I would love to spend the nexthour asking you more questions,
but I appreciate your time.

Thank you so much.
Have a great day.

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