Attracting and Engaging Seven-Figure Net-Worth Candidates
Keeping them engaged through the franchise development process takes experience and expertise.
By Dave Buzza, CFE
So, you want to attract a seven-figure net-worth candidate to your brand. Is it because your franchise is a high-investment model or for multi-unit or area development? Regardless of the strategy, attracting and engaging seven-figure net-worth candidates can be especially challenging in today’s small-business ownership world.There seems to be two general types of these candidates. Both are obviously highly-accomplished with skill sets that are typically broad and deep. The first type (which we will refer to as the financial type) thinks he can go it alone. Franchising for some of these individuals is not only misunderstood, but also undervalued. The financial type typically explores multiple franchise opportunities (because of his financial situation), as well as independent businesses typically found through local business brokers or web listings such as Biz Buy Sell.The second type of seven-figure net worth candidate (which we will call the management type) is similar to the first, but has typically managed a large number of employees and has less core profit and loss and other deep financial and budgeting experience than the first type. These individuals are inclined to seek out partnerships (franchising) to help provide the core business or entrepreneurial needs they may be missing. These folks want to be in business “for themselves but not by themselves.” They’re more comfortable and confident with having resources at their fingertips. It’s an environment they’re used to and maybe even expect.Regardless of type, both can potentially make excellent franchisees. At AlphaGraphics, we find that leads for these two types typically originate through different lead generation channels. Leads for the financial types are most often generated via marketing an existing business opportunity. Whether it’s a resale of one of our own units or an acquisition/conversion opportunity, they seem much more inclined to buy an existing business as an entry strategy as opposed to other pathways (i.e. start-up).
What These Candidates are Seeking
These candidates typically come to us without a coach, consultant or broker. They scrutinize the business for sale web sites and financial opportunity/return on investment is usually more important than the industry involved or their passion about the particular business. They want to buy a business opportunity, not necessarily a brand opportunity. They are also more flexible about the location of the business.The more management experienced candidates are typically focused on looking for models that either fit their lifestyle, passion or experiences. They start out on an industry search rather than an existing business path. They are also generally more open to looking at multiple pathways and tend to ground themselves in the local community. An efficient lead generation strategy for these individuals is utilizing highly-selective demographic targeting along with LinkedIn, social media, direct mail and the coaching/consulting/broker networks.Again, both types can be strong performers and happy franchisees; they simply approach the process and due diligence differently. Keeping them engaged through the franchise development process takes experience and expertise.The financial candidate can be easy to attract, but can be difficult to engage and reluctant to follow the process. These candidates primarily want to know the numbers about the specific business as opposed to doing a deep dive on the brand or understanding the brand story. In our process, when we receive a lead from a particular business for sale, we won’t allow the candidate to see the financials of the selling business until he has gone through the first four steps of our process (the fourth being our discovery day). This can be very difficult to manage (especially for the “high D” individuals from the DISC profile system). And, if not managed carefully, they will withdraw quickly.We want our candidates to be passionate about our model. And even though they may be very ready and able financially, we want them to take sufficient time engaging with us so we can both determine if the relationship is a solid fit. Also, because we handle more than 90 percent of our own resales, we commit to our selling owners that we won’t introduce an interested prospect until he has been thoroughly vetted and awarded a franchise opportunity after a discovery day visit. Often this is like holding back a horse from the starting gate because we want to walk them around the track first. At minimum this can be tricky, but it’s worth the effort. Our post-discover day testimonials from these financial-type individuals validate this approach.The management candidate is more often attracted to the brand either through our own website and virtual brochure, a franchise portal (used very minimally for this type candidate), or a franchise consultant/coach/broker. Due to the complexity and technical basis of our model, most management-style, seven-figure net-worth candidates appreciate the concept of a personal consultant to help guide them as they explore different brands/industries for their first foray into entrepreneurialism. Culture, fit, strategic vision and having a business that serves a “noble cause” are very often key decision criteria for them. They prefer to learn everything about the brand first to get the mind, heart and gut right and then look at how they actually could develop a business within the brand.
Steps to Engagement
In working with either type it’s best to adjust your style, approach, delivery and process steps accordingly. Here are some other tips to attract and engage a seven-figure net worth individual:
Hire highly experienced development directors, preferably those with small-business ownership experience. It would be even better if they were previous franchisees within your given model.
The follow-up on the initial inquiry must be absolutely perfect with a maximum one-hour response time. If you use a lead generator or appointment setter, make sure they have the aptitude, demeanor and experience to engage these individuals.
Have a strong Item 19 in your franchise disclosure document. It should basically take them through a full profit and loss of your business model.
Involve your other executive team members in the process early on. Seven-figure individuals are comfortable in having access and dialogue with top management.
Seven-figure candidates love metrics, so be ready to share number in the first engagements with these candidates.
Income and wealth accumulation (exit) candidates want to hear not only about recurring income, but how they can build wealth through this partnership.
Challenge candidates and keep the bar high throughout the process. Set the expectations and manage them. Assign candidates homework (tasks) after each step of the process. If they don’t rise to the expectation, close the file.
Include the wife/partner. This is especially critical with these types of candidates because it’s likely that the spouse/partner is a big contributor to the seven-figure net worth. Despite what one may say, the other can blow up your deal in the 11th hour. Require both individuals to be at your discovery day event.
Run a highly-polished discovery day. This is your chance to shine. Educate your team as to the highly critical significance behind this event. Your staff should dress to the occasion, including a coat and tie for the men. For the most part, candidates live in this world, and an appropriately-dressed staff always exemplifies professionalism and respect. The entire process from booking through closing of the event should be seamless, prepared, on schedule and of the highest caliber.
Seven-figure net-worth candidates can be especially challenging to attract and engage, since there are many choices for them to consider. But if this is what your brand either desires or requires, these best practices we’ve discovered should help. n
Dave Buzza, CFE, is chief development officer of AlphaGraphics. Find him at fransocial.franchise.org.