Transcript Franchise 2014 BO

Building High Performance
Sales Teams
Terry Powell, CFE
Entrepreneur & Founder
The Entrepreneur’s Source
Terry Powell, Founder of
The Entrepreneur’s Source
Terry Powell’s life has been dedicated to the
development and advancement of the
entrepreneur and those who desire to become
one. Powell founded The Entrepreneur's Source
in 1984 as a business coaching firm that provides
support and guidance to aspiring business
owners. Today, it has evolved into North
America’s leading career and franchise business
coaching company with more than 200
franchisees throughout the United States and
Canada. Powell’s experience ranges from
developing franchises to consulting and advising
future franchise owners and entrepreneurs. He
received his Certified Franchise Executive (CFE)
certification from the International Franchise
Association (IFA) in 2004, and is a Board Member
on the IFA’s Diversity Institute.
Panel Introductions
Van
Ingram
Bob
Franke
Chris
Cheek
Taco Johns
Sonic
Newks
Mike
Rotondo
Tropical Smoothie
Cafe
Mike
Pearce
ServiceMaster
TODAYS TOPICS
Determining
Hiring/
Using
Team Needs
Promoting
Brokers
Compensation/
Momentum
Incentives
Build/Keep
Determining Team Needs
Van
Ingram
Bob
Franke
Chris
Cheek
Taco Johns
Sonic
Newks
Mike
Rotondo
Tropical Smoothie
Cafe
Mike
Pearce
ServiceMaster
Hiring/Promoting/Profiling
Van
Ingram
Bob
Franke
Chris
Cheek
Taco Johns
Sonic
Newks
Mike
Rotondo
Tropical Smoothie
Cafe
Mike
Pearce
ServiceMaster
Use of Franchise Brokers
Van
Ingram
Bob
Franke
Chris
Cheek
Taco Johns
Sonic
Newks
Mike
Rotondo
Tropical Smoothie
Cafe
Mike
Pearce
ServiceMaster
Compensation/Incentives
Van
Ingram
Bob
Franke
Chris
Cheek
Taco Johns
Sonic
Newks
Mike
Rotondo
Tropical Smoothie
Cafe
Mike
Pearce
ServiceMaster
Building and Keeping
Momentum
Van
Ingram
Bob
Franke
Chris
Cheek
Taco Johns
Sonic
Newks
Mike
Rotondo
Tropical Smoothie
Cafe
Mike
Pearce
ServiceMaster
Thank You!
Van Ingram Background
 Valvoline Instant Oil Change
 Long John Silver’s
— Yorkshire Global (LJS / A&W All American food)
 Yum! Brands
 Volvo Rents
 Captain D’s
 Arby’s
 Taco John’s
A Few Good Salespeople
Determining Your Needs
 Output: Approximately 25 Deals
 Goal Identification: Conversion Model vs. New
Franchisee
— Unique experience required?
— Level of sophistication of business model?
— Level of sophistication of candidate?
 Building a Broad and Deep Team
— Diverse backgrounds
— Operations, IT, Finance, Real Estate Assessment, Lease
Negotiation
— Ability to discuss and convey financial information
commensurate with investment
— Augment each others capabilities
Hiring & Promoting
From Within
Outside
Cultural Fit
New Ideas
Improve Morale
Avoid “Insanity”
Maintain Momentum
Change Culture
Recruiting Tool
Enter New Markets
Career Path
Rolodex of Contacts
Compensation and Incentives
 Base Salary vs. Commission Based
 Timely Payouts
— Quarterly vs. Annual
 Match Incentives with Corporate Strategy
— Meet your financial screen
— Strategic Market Plan
— Alignment with mission, core values and business philosophy.
— Commitment to the Operating System and Marketing programs.
The best deal you do this year, will be the bad deal you walk
away from
Build and Keep Momentum
 Benchmarking With Other Franchise Leaders
 Industry Trade Shows
— Franchise Leadership Conference
— Multi-Unit Franchising Conference
— Restaurant Leadership Conference
— Restaurant Finance Development Conference
— Franchise Expo Conferences
— Channel / Industry Specific
 Referral Programs
 Utilize PR
Mike Rotondo
Chief Executive Officer
Tropical Smoothie Cafe
Mike Rotondo
 Wendy’s
 The HoneyBaked Ham Company
 Arby’s
 Tropical Smoothie Café
• 2008: VP of Operations
• 2010: Chief Operating Officer
• 2012: Chief Executive Officer
Tropical Smoothie Café, LLC
 Franchising since 1997
 Better-For-You Quick casual restaurant chain,
50% Smoothie Sales / 50% Food Sales (wraps,
flatbreads, salads, sandwiches)
 Purchased by Buckhead Investment Partners in
2012
 400 open locations in 38 states
 2014 – Sell 100 franchises / Open 70
 2015 – Sell 150 franchises / Open 100
 Finish 2015 at 500 units
Needs Determination – Franchise
Development (1)
 How much growth do you want, how much do
you need, how much can your organization
handle?
 How many salespeople will you require to
achieve results?
 How many leads can one salesperson
effectively handle?
— How much automation does your sales system have? CRM
System?
— How good is your sales process?
— How experienced are your salespeople in YOUR system?
— Do you utilize lead qualifiers?
Needs Determination – Franchise
Development (2)
 Will your franchise model produce large numbers of
leads and franchise sales?
— Economic model, support and infrastructure, system size, years
franchising, senior management, franchisee profitability etc.
 Experienced vs. Inexperienced
— Experience vs. Bad Habits?
— Time investment in training inexperience
 Franchise Development person must “pay for
themselves” at a minimum
— Cover all costs associated w/ employment (Benefits, Insurance,
401K, Cell Phone)
 “Ratchet”
System – Franchise Sale commissions
increase as more deals are done
Tropical Smoothie Café Franchise
Development Organization
CEO
VP Development
Corporate
Director
Corporate
Director
Associate
(2015)
Area
Developer
Director
Hiring & Promoting in Franchise
Development
 Hiring – Cultural Fit
— Ethics, Honesty and Cultural Fit for your organization are not
debatable
— Customer service attitude – consultative selling
— Values – Solid Relationships, Creative Spirit, Playing to Win,
Live Better
 Reward the winners
— Commission
— Additional responsibility (Does your salesperson WANT to be in
sales management?)
— Create a pathway for advancement
Franchise Brokers
 TSC Utilizes:
— Franserve
— Franchise Brokers Association (FBA)
— 2-3 deals a year
 TSC Does Not Utilize:
— Entreprenuer’s Source
— FranNet
— FranChoice
 Merely a question of how much of the franchise fee your
organization wants to pay out to brokers
Build & Keep Momentum
 Sales Team MUST stay abreast of all strategic
initiatives within your organization in order to sell
the benefits of your system effectively
 Constantly communicate the wins to your
prospects
 PR is a Must Have
 Ratchet marketing spend to meet your goals in
development once a baseline is set – constantly
re-evaluate what is working and what is not
 Continually raise the bar for best results!
Compensation & Incentives
 Base salary commensurate with experience
 Corporate cell phone
 Healthcare, 401K
 “Ratched” commissions increasing by
increments of 10 deals per salesperson
 Income determined by volume of deals closed
Panelist - Bob Franke
 Senior Vice President
Franchise Sales & International – Sonic
 Previous positions:
— Managing Director Europe & Latin America - McDonald’s Corp.
— VP of Operations & Development - Mrs. Fields Famous Brands
— VP of Franchise Development – Steak n Shake
— COO - Epcon Franchising - homebuilding
 Began in Shawnee, OK in 1953
 $4 Billion in Sales
 3518 Locations in 44 states
 391 Company locations in 18 markets
 350 Franchisees
 Average investment - $1 million plus land
Selection – Determining your team
1. Executive team has buy-in on growth objectives
2. Budget investment critical to match objectives
3. Systems & processes must be set as you build your
team
— New hires should enhance your process based on their
knowledge
— Team must grow and be relevant as new methods of effective
sales are added to your system.
What your Brand needs to
make it easier to recruit talent
 Brand has a compelling story to sell
 Franchisee ROI most important
 External news and validation is visible
What does the ideal franchise team look like?
Field
Operations
Services
Sales
Director
Franchise
Sales
Marketing
Public
Relations
& Digital
Lead
Generation
- Research
Real
Estate
Support
CRM
Sales
Director
Profiling Tools to Recruit your Team
 Candidates must have a passion for selling
 In love with the brand and stay relevant with
change
 Results matter
— Caution on a limited 2 year past tenure at one brand.
— Phone interviews are your best first impression
— Present real brand scenarios in selling and persuasion in your
face to face interviews (Skype is a good test)
— Validate technology savviness
Use of Franchise Brokers
 An option if you don’t have a good system
— Their network may be broader than yours
 Can augment existing team as long as they are
great stewards of your brand (not full time, best
efforts)
 Only pay for signed deals
 Can be an expensive alternative
 Keep your options open – no exclusivity
Keeping Momentum
 Celebrate successes with the entire company
— Post goals, ring bells, intranet memos
 Retain a portion of bonus for team results
 Innovate on lead generation – let them take
risks
 Stay current with industry as a team.
— Team development meetings at FLDC, IFA, Multi Unit
 Retention = Momentum
— Usually takes 6+ months to onboard new sales directors
Compensation and Incentives
 Pay for experience and past results
 Sales Directors
— $110,000-$150,000 base
— Commission on new contracts, by commitments - $1,500 each
— Have an annual minimum threshold before commission starts
— Commission upon openings that were sold - $1,000 each
— Existing Zees who add more commitments - $500 each
— Paid annually at end of fiscal year – same time as staff bonuses
— Capped at 100% of base salary
Compensation and Incentives
 Inside Sales & Marketing Manager
— $65,000 - $90,000 base
— 10-15% bonus based on team goals
 Research & Lead associate/coordinator
— Entry Level to 5 years in work force position
— Great phone skills
— CRM Savvy
— Sales Directors should vet during hiring process
— Can be a telecommuting position
Chris Cheek
 14 Years of Restaurant Franchise Development
Experience
 Spanning multiple categories & venues
— Bakery-café: Bear Rock Café, Bruegger’s, La Madeleine
— Gourmet burrito: Freebird’s World Burrito
— Pizza delivery: Topper’s
— Fast Casual 2.0: Newk’s Eatery
— Non-traditional development: airports, military bases, hospitals
Team and Individual Needs
 Clarity and alignment
— Clear, measurable and time-bound goals
— Who does what to whom and for whom
— Sale process (candidate needs to know the process well)
 Credibility
 Closer – “Respectfully aggressive”
 No heroes
 “Road block remover”
 Understand and believe the key message so
well you can get candidates to repeat it
 Franchise sales needs to be seen as the conduit
for growth, not a nuisance to operations
Hiring and Promoting
 Be certain to develop a target candidate profile
— Prevent sales people from spending time with the “wrong”
candidates.
 It’s better to work fewer leads because..
— You “killed” poor leads early
— “Closed” good leads faster
 Hire for key traits; train the domain skills
— Can’t train authenticity, genuine ability to connect, respectfully
aggressive, ethics
 Establish that you are a “performance based”
organization
Franchise Brokers
 Limited but good experience with broker
networks at Bear Rock Café
 As with every vendor, there are good ones and
bad ones
 Great fit for a start-up franchisor with limited
capital to hire sales force
 Trade-off is a significant portion of franchise
fees (and potentially royalties) will be part of the
compensation
Maintaining Momentum
 Lead by example
 It has to be fun
 There have to be results
 People have to feel they are building something
special
 They have to be aware of the competition
 Remove underperformers quickly
— Don’t make it a personal challenge to turn around the obvious
Compensation and Incentives
 Within reason, you get what you incentivize
 Variable compensation
— Incentivize beyond the signing
— 50% on signing and 50% on opening
— Group incentives
 Incentives need to be more than just W-2 driven
— Building something special
— Having fun
— Collaborating
Mike Pearce
 Chief Development Officer – ServiceMaster
— Seven Brands: Terminix, American Home Shield, ServiceMaster
Restore, ServiceMaster Clean, Merry Maids, Furniture Medic,
Amerispec Home Inspection
— 6,900 Company Owned and Franchised Territories
 Real Estate Development BTS Services 12
Years
 Franchise Development 15 Years
—ServiceMaster
—Dominos Pizza
—Captain D’s/Del Taco
Team and Individual Needs
 Internal Sales vs. External
— Goal for existing franchisees – 35% of all new licenses
— Means system is vibrant and franchisees strong
 Budget for each sales person – 25 Deals
— 18 to keep job, 30 to gain star status and extra commission
 Proper Support Staff
— Keep team selling!
— I have a cold calling machine for conversion sales
— Lead qualifiers to sift through internet leads
— Demographer/Business Analyst
 Proper Support Tools
— We use FranConnect (Captivate!)
Team and Individual Needs
 ServiceMaster is a 65 Year old system
— Mature is an understatement
 Recently created internal Business Brokerage
service
— Create Value by helping to create marketplace
— Competitive Offering by charging 40% less that external
— Better Control who franchisees are selling to
— Utilize leads in areas where new licenses are not available
— Target bottom 5% of system/offer graceful exit
— Don’t leave this to chance, closures are not good!
Team and Individual Needs
CDO
Admin
Asst.
Dir. Mktg
2015
Ad Budget
200 New Sales
1% Close Rate
Need 20,000 Leads
x
$100/Lead
=
$2,000,000
Dir. Fran
Dev
Dir. Fran
Dev
Dir. Ops
Dir. Fran
Dev
Dir. Fran
Dev
Conv.
Manager
Dir. Fran
Dev
Dir. Fran
Dev
Lead Qual
x2
Dir. Fran
Dev
Dir. Fran
Dev
Contract
Admin x2
Dir. Fran
Dev
Dir. Fran
Dev
Demographer
Dir
Brokerage
Transfer
Manager
2015
Budget New
300 Licenses
100 Internal
(10 per Dir.)
200 External
(20 per Dir.)
Compensation and Incentives
 ServiceMaster Base Pay $50,000 - $80,000
 Rising Commission Structure
— Starts at 9% of Fees Received for 1st 12 deals
— Rises 1% for every 5 deals after that to a 19% Cap
— Extra Bonus at deal #30 and beyond
— Extra Bonus for total career license sales at the end of each year
 Control Quality
 Dealing with back-offs
 Top Salesperson made $345,000 last year
Franchise Brokers
 Utilize majority of broker networks
 Limited success
— 15 deals per year in good years
 Quality Leads
— They help maintain contact
 Consider how complicated your offering is
— You have to sell to them and their prospects, takes time
 Consider your pecking order on Commission
scale
— We pay $12k - $15k per deal
Hiring and Promoting
 Create a “Sales Culture”
— Competitive with Open Information
— Find Competitors
 Have four people screen and interview
 Use Behavioral Interview Questions
— Resiliency is one crucial character trait you need to find
 Follow Up on References
 The Two Commitments
— Someone who can go three layers deep!
 Match the Salesperson with the Ideal Prospect
Profiling
 ServiceMaster
 Use multiple tools
 Predictive Index – Sales Capability/Resiliency
 Intelligence Testing – Battery of Tests
 Ideal Candidate
— Smartest Person in the Room
— Able to connect emotionally
— Financial Savvy
— Adaptable
— High Dominance/Competitive
Building and Keeping Momentum
 “Franchise Sales is all about Momentum”
 Energy feeds on itself
quote me
— Builds confidence, creates swagger, changes the conversation
 Resiliency is a crucial character trait
 Makes your PR work! Plug for Fish PR
— News travels fast, keep the news flowing (use social media)
 Cadence of Accountability
— Weekly team meetings at minimum
 Peter Drucker “The Best Way to Predict Our
Future is to Create It!”