Sandler Training: The franchise opportunity
Startups speaks to Shaun Thomson, CEO of sales and management training franchise Sandler UK. He shares his business opportunity lowdown and reveals plans to double franchisees
Description: Sandler Training is the world’s largest sales and management training company. It offers companies of all sizesbusiness development, consulting, coaching, training and recruitment support.
Started in: 1983
Founders: David H. Sandler
No. of franchises: Worldwide 250; UK 25
Average cost per franchise: UK £42,000+VAT
Now a vast operation with 200 offices throughout the world and delivered in 27 languages, the Sandler Training franchise operation can trace the Sandler sales and management techniques back more than 40 years to when David H. Sandler developed a successful sales methodology.
Today, the training techniques, which revolve around reinforcement, repetition, coaching and accountability, are employed by companies of all sizes – and delivered by a global network of franchisees.
The company started franchising in 1983, expanding quickly and adding new training modules to its range to focus specifically on management, leadership, negotiation, customer service, executive coaching and mentoring.
In 2003 Shaun Thomson, the owner of an IT company, came across the techniques and after successfully using them as a customer he bought the UK rights and became its first franchisee here. Since then, Thomson has become CEO of Sandler UK and is looking to double the 25-strong franchise operation in the UK by 2020.
Here, he tells us more about the franchise opportunity, the attributes of a perfect franchisee, and how he’s planning to grow the business.
So, Shaun, what stood out for you about Sandler Training?
All businesses need to sell; it’s the lifeblood of everything they do, but so many people are uncomfortable in the role and feel they must use methods and devices foreign to their normal styles. Sandler allows people to remain themselves, to understand the process and remain in control of their own sales.
How confident were you that it would work in the UK?
I knew instinctively this would work well here but needed to prove the model, before asking other people to risk their hard earned money. So I was the first franchisee and still run a training centre today. I don’t ask anybody to do anything I’m not prepared to do myself.
Where did it open its first franchises?
We opened our first franchise in 2004 and six franchisees are now into their second five-year term with us as they love the business and the rewards it brings.
The franchise opportunity
What makes the franchise different / unique?
In my opinion we have the perfect franchise. We use our own product to help franchisees tap into a huge market where there is no other market leader and what’s more our method is based on repeat business; but it’s not for everyone. As Sandler consultants we help businesses reach the summit of their sales ambitions. We act as guides, think of us as Sherpas not shepherds because, our clients are not sheep. Our chosen clients are bold business leaders – they have made brave choices, taken risks, as they have led their business. They don’t want hand-holding. They want someone to show them the hand-holds, where to reach, how high to stretch instead of forming an orderly queue behind their competitors. Our client engagements are measured in years not days as we become trusted advisors to businesses serious about growth.
What services does it offer?
We are a business development company. We help our clients with a structure for their sales process, their prospecting, their account management and their sales management. We also look at the people side of the business. Have they got the right people in the right roles? Do they need help with the recruitment process? We assist businesses with their overall sales strategy which includes implementation of new products and services to their market.
How big is the market opportunity?
Last year British employers spent £49bn on training of which £20.2bn was invested by firms with fewer than 25 employees, according to the UK commission for Employment and Skills. One factor that is very apparent is that in today’s economy the small to medium sized business cannot sit still waiting for things to pick-up, they have to make it happen themselves and increase market share. That’s where we come in. We are agents for change – the definition of insanity is doing the same thing over and over again and expecting different results. For large companies investment in training is normally already in place but they need consistency in material and delivery. With a worldwide footprint Sandler is well positioned to deliver this with more than 250 training centres in over 26 countries and material in 13 languages.
How many franchisees does the brand have today?
In the UK there are 25 franchises and we intend to double this by 2020.
How is the brand marketed?
With high-profile brand communications and thought-leadership in the national business press, Sandler UK works with all our franchisees to pre-sell their services in the business to business market. Our franchisees have a toolkit to create their own personalised website, and use digital marketing to stimulate client-leads.
How are regions divided?
We do not have exclusive territories as this is a high referral business, but we do have large regions in which franchisees can market themselves and a code of ethics to give clarity to how we share business with each other.
The perfect franchisee
What is the franchisor looking for in potential franchisees?
Sandler franchisees succeed from a diversity of backgrounds and industries. From corporate to entrepreneurial, from engineering to human resources. The one thing they all have in common is a successful business background and self-belief. Determination, drive and boldness are the common traits. We have the systems and the methodolgy but it’s the franchisee’s energy and activity that grows the business because it’s their business; this is not a job.
Is it home-based? Part-time / full-time?
It can be started from home, but most of our franchisees quickly move into office space and hire training space as they grow, but to begin with it’s a full-time business. As organisations grow we show them how to add systems and processes that allow them to grow a saleable asset and not remain as a sole practitioner.
How are franchisees vetted?
We have a mutual evaluation process to establish that we are right for each other. As part of the process we use our online attitudinal and behavioural assessment tools. This helps us identify the areas where franchisees will need the most help. We do encourage our applicants to speak to existing franchisees and we take feedback from the field as it is important that our existing franchisees feel happy referring business throughout our network.
What do franchisees that sign-up get?
Initial Training in our International head office in Baltimore, further training from our UK central office in Chipping Norton. The support of the UK Coaching team as long as they hold the franchise. A personalised website, initial inventory and a proven route to market to get them off to a flying start.
How much do they pay? What are the ongoing fees / costs?
The business £42,000 plus VAT. There is an ongoing monthly royalty fee of 10% and a flat rate branding levy
How do franchisees finance the purchase – what arrangements does the brand have in place with banks?
We have excellent relationships with all three of the main franchise lending banks, NatWest, Lloyds & HSBC who will lend up to 70% of the lending requirements for suitable individuals.
Success and growth
How successful are some of the franchisees today?
This is a very high margin business. Gross margins are 88%. The average turnover of our top 20% of UK franchisees when annualised for the whole of 2012 is over £220,000. However, the financial rewards are not all that drives our franchisees. For them it is the freedom to not only earn the money they are worth but also the freedom to live their life on their terms without having to climb the greasy corporate pole that takes them away from their families and fulfilling personal goals. The bonus is in not only enjoying what they do but also enjoying helping clients get to where they want to be. In the words of one of our franchisees “You told me there were a lot of benefits to me in starting this business, but I get a real buzz from clients thanking me – I’ll never get bored of that”
How is the brand looking to grow?
As we continue to grow the brand, we know that a 10% market share would be huge and would make us the market leader and that’s a big hairy audacious, but achievable goal for us.
What is the potential of the business?
There are many multi-million dollar Sandler businesses in the US and the UK is on track to emulate that success. We expect to have our first million pound franchise in the UK next year.
What will the challenges be in achieving that?
As we grow the challenge will be to continue to keep the delivery and Sandler Methodology consistent in every training centre. However we are committed to doing this and are already putting tools in place to achieve this including internal certification and ongoing reinforcement. We practice what we preach, if our model for our clients is one of ongoing reinforcement training and behavioural change then so must it be for us. We have three training conferences a year in the UK to reinforce our own best practice and a further three conferences internationally. Attendance is high and new tools are being developed all the time. Sandler has just launched a new Learning Management System to allow clients to access online learning and augment the face-to-face sessions.
What awards has the business won?
At the Entrepreneur Magazine Franchise Awards, Sandler Training ranked #1 in Training Category five times in a row. My wife Fiona and I have been awarded the 2012 David H. Sandler Award. The award is the highest in the company and only 12 awards have been given in the history of the company, all previously within the USA. Bruce Seidman, president of Sandler Systems, Inc, said: “Shaun and Fiona have been given this award for their service and support of the UK Sandler network as well as for the phenomenal development of the UK training market.”
To what extent are the founders involved today?
We, as UK founders, are still 100% involved in the business and in particular with new franchise recruitment
Is the company a British Franchise Association (BFA) member?
We are full members of the BFA and are committed to ethical franchising