Terry Powell, CFE
Entrepreneur & Founder
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.

Van
Ingram
Taco Johns
Bob
Franke
Sonic
Mike
Rotondo
Tropical Smoothie
Cafe
Mike
Pearce
ServiceMaster
Chris
Cheek
Newks

Determining
Team Needs
Hiring/
Promoting
Compensation/
Incentives
Momentum
Build/Keep
Using
Brokers

Van
Ingram
Taco Johns
Bob
Franke
Sonic
Mike
Rotondo
Tropical Smoothie
Cafe
Mike
Pearce
ServiceMaster
Chris
Cheek
Newks

Van
Ingram
Taco Johns
Bob
Franke
Sonic
Chris
Cheek
Newks
Mike
Rotondo
Tropical Smoothie
Cafe
Mike
Pearce
ServiceMaster

Van
Ingram
Taco Johns
Bob
Franke
Sonic
Mike
Rotondo
Tropical Smoothie
Cafe
Mike
Pearce
ServiceMaster
Chris
Cheek
Newks

Van
Ingram
Taco Johns
Bob
Franke
Sonic
Chris
Cheek
Newks
Mike
Rotondo
Tropical Smoothie
Cafe
Mike
Pearce
ServiceMaster

Van
Ingram
Taco Johns
Bob
Franke
Sonic
Chris
Cheek
Newks
Mike
Rotondo
Tropical Smoothie
Cafe
Mike
Pearce
ServiceMaster

 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

 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

From Within
Cultural Fit
Improve Morale
Maintain Momentum
Recruiting Tool
Career Path
Outside
New Ideas
Avoid “Insanity”
Change Culture
Enter New Markets
Rolodex of Contacts

 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

 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

Tropical Smoothie Cafe

 Wendy’s
 The HoneyBaked Ham Company
 Arby’s
 Tropical Smoothie Café
• 2008: VP of Operations
• 2010: Chief Operating Officer
• 2012: Chief Executive Officer

 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

 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?

 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

CEO
VP Development
Corporate
Director
Associate
(2015)
Corporate
Director
Area
Developer
Director

 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

 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

 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!

 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

 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

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.

 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
Public
Relations
Franchise
Sales
Marketing
& Digital
CRM
Real
Estate
Support
Lead
Generation
- Research
Sales
Director

 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

 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

 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

 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

 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

 14 Years of Restaurant Franchise Development
Experience
 Spanning multiple categories & venues
—
Bakerycafé: 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

 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

 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

 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

 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

 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

 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

 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!)

 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!

CDO
Dir. Mktg
2015
Ad Budget
200 New Sales
1% Close Rate
Need 20,000 Leads x
$100/Lead
=
$2,000,000
Admin
Asst.
Dir. Fran
Dev
Dir. Fran
Dev
Dir. Fran
Dev
Dir. Fran
Dev
Dir. Fran
Dev
Dir. Fran
Dev
Dir. Fran
Dev
Dir. Fran
Dev
Dir. Fran
Dev
Dir. Fran
Dev
Dir. Ops
Conv.
Manager
Lead Qual x2
Contract
Admin x2
Dir
Brokerage
Demographer
Transfer
Manager
2015
Budget New
300 Licenses
100 Internal
(10 per Dir.)
200 External
(20 per Dir.)

 ServiceMaster Base Pay $50,000 - $80,000
 Rising Commission Structure
— Starts at 9% of Fees Received for 1 st 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

 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

 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

 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

 “Franchise Sales is all about Momentum” quote me
 Energy feeds on itself
— 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!”