t o p i c a l a d v i c e
franchise clinic
Our panel of experts offers advice on a range
of issues for franchisors
Élise Billy William Offen
Élise is founder of EXB Legal, William is Managing Director of
specialist franchise lawyers. Peoplenomics® and has taught
Prior to founding her specialist thousands of people how to sell
firms, Élise worked at major
in the UK, USA and South Africa.
city law firms and international
His teaching is based not on the
businesses and has direct
usual, often cynical, methods of
commercial experience
selling but on achieving success
from running internet and
through high quality people
consultancy businesses.
interaction.
Under what circumstances do we have I am concerned about the lack of sales
to refund the deposit to a potential experience some of my potential
franchisee who does not go ahead? franchisees have. How can I develop
Usually this will be set out in the deposit agreement that you
their sales skills and increase their
and the potential franchisee sign when the deposit is paid. If
confidence effectively?
you do not have a deposit agreement, I strongly recommend
Telling prospective franchisees that their new career involves
that you have one prepared if you are going to take deposits
selling can stop them in their tracks, especially if they are
from potential franchisees. Legally, the deposit agreement
one of the greater majority of the population that believe
can say anything that you want in relation to refund of the
the ‘act’ of selling is something that should be treated with
deposit as long as it is made clear in advance. However, there
utmost suspicion.
are ethical guidelines from the British Franchise Association
(bfa) and in addition you should consider that an unfair
For some potential franchisees, convincing them that they
deposit agreement is likely to deter potential franchisees and
can sell can be a challenge and failure to do so means that
prevent them from progressing to the next stage.
good talented franchisees are lost at the first post. It is
important to be clear about the type of skills franchisees
Generally, a potential franchisee who does not proceed
need and understand what training is required.
should get back his or her deposit in full or minus any direct
costs that you have incurred. This does not therefore include First it is necessary to see selling for what it is – a simple
deductions for your time or for general administration, interaction between people, and something that we all do
but could include for example any demonstrated legal every day. With selling reduced to an ordinary process your
costs. Ideally, the maximum amount of deposit that can be franchisees will become confident with everyone they meet
deducted should be capped to a modest limit and set out in and will enjoy their interaction with people, whatever the
the deposit agreement. reason for it, at any particular time.
It is up to you as the franchisor to ensure that you minimise To develop your franchisee’s skills in sales is a matter of
your potential losses and costs in relation to a potential
developing their communication and interaction skills,
franchisee, so that you do not incur significant costs before a
which will give them the confidence to deal effectively with
franchisee has committed to the main franchise agreement.
potential customers and clients. The added bonus for them
For example, it would be inadvisable to order equipment
is that it will spill over into their personal lives and allow
or vehicles for a franchisee until they have signed the main
them to grow as individuals. The added bonus for you is that
agreement and paid the upfront fee for the package. By
you will gain not only high quality sales, but also gain great
minimising your costs, you can ensure that you can cover
ambassadors for your business.
yourself without having to take an excessive deposit or make
large deductions that could damage your reputation.
www.franchisornews.co.uk | 38
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53