Nigel Toplis discusses what to look for in a potential new business partner.
As any seasoned franchisor will tell you, finding franchisees is easy. However, finding the right franchisee is not. If you’re in the early stages of extending your business, via franchising, then it’s vital to make good, well-considered choices. Skilful recruitment is the back bone of all businesses.
It’s far better to aim for a slow and steady expansion, by creating a capable franchise network, than to rush ahead with anyone who expresses an interest. Just because they have the money to invest, it doesn’t make them potentially good business partners.
This is true for all franchisors, but it’s especially important for fledgling firms. Misguided decisions can be costly and ultimately stall your plans for expansion. It will also drain your energy and potentially damage your brand. If you don’t think someone is the right fit for your brand, then don’t recruit them.
What makes a good franchisee?
If only there was a simple test for finding the perfect franchisee, it would make life so much easier. However, just as every franchisor is different, so is every prospective franchisee. They all bring different skills and characteristics. It’s about finding people who have the right attitude and aptitude to work in your business and franchise system.
Typically, I do try to avoid three ‘types’ of individuals.
1: The entrepreneur. I am not knocking entrepreneurialism per se, but in a franchisee it can be disastrous. You want people who will take your business idea and run with it. Not try to reinvent it. Certainly, it is fine for people to add their own twist, but what you really need is people with an enterprising spirit, not entrepreneurial flair. The latter best suits independent start-ups.
2: The ‘get rich quick’ mentality. Franchisees have every right to expect to make good money. But it’s important that they understand that business success takes time, effort and dedication. Franchising is a very effective route towards a good secure income, as well as the chance to become your own boss. But it’s a long-term investment, not a quick, easy way to becoming a millionaire.
3: The shirker. Anyone who takes on a franchise needs to be prepared to roll up their sleeves and work – especially during the early years. Owning a business doesn’t mean endless rounds of golf while your team gets on with the real work. As your franchise business grows, there will be opportunities to delegate responsibilities, allowing you to head for the first tee from time to time. The owner’s role does evolve but franchisees must be prepared to put in the hard work up front.
Playing Cupid
Recruiting the right franchisee is never full proof. It remains a judgement call and leap of faith. However, there are processes you can adopt to make evaluation more thorough and hopefully lead to successful recruitment.
Make a list of the qualities you value. Imagine you are posting a job advert for a general manager. What would you say are ‘essential’ qualities? No one will meet all your criteria, while someone who only ticks half the boxes may still bring bags of energy and enthusiasm to the role, and could be successful. Some people look good on paper, but don’t have a strong work ethic.
And if your franchisees need to be outgoing, with an ability to build relationships through networking, they will have to possess strong interpersonal skills. There are many pitfalls on the route to carefully selecting business partners.
A prospective franchisee might say all the right things and have many relevant qualities but can you work with them? And will others be able to work with them too? Look at how they treat and interact with other people. What’s their attitude like when talking to the receptionist? Do they readily engage with existing franchisees? Think about whether they are likely to build good working relationships with customers, suppliers and future employees, as well as head office staff.
Have they done their homework?
Any serious franchisee will check out several options before deciding on starting a business. Ask them which other franchises they have considered, and whether they have held any discussions with other franchisors. If they have rejected other franchise opportunities, ask them why. Their answers could reveal a lot about what they value, as well as their attitude.
Have they sought advice from the British Franchise Association (BFA) and what research have they already undertaken? Good franchisees tend to be self-starters, so look for evidence of this.
Do they have a good support network?
As with any new business, there will always be difficult periods as owners adjust to a new way of working and life. Obviously, as their franchisor, you will be there to offer advice and mentor them. But ask how they cope in times of stress, and do they have anyone to turn to for support and encouragement. Family support is so important. There have been occasions when a struggling franchisee will inform me that their spouse never wanted them to go into business, and therefore took no interest in it.
Building a relationship
I often say that the bond between a franchisor and franchisee is like a marriage. Both parties bring different qualities to the table and, over the years, the relationship should flourish. But it must be a two-way street.
Think carefully about how your model benefits franchisees. Is it fair? Is it designed to help them make the best possible start? How extensive is your training? Do you help them get to grips with finance, sales and marketing? What about long term growth and development? How do you expect the network and your franchisees to evolve over the next five to 10 years?
If you wish to attract high-calibre franchisees, you will need to offer them support and excellent prospects right from the start. Explain your vision for the future, and how they are part of it.
Just as you are seeking certain characteristics, skills and commitment in a franchisee, then they should also be analysing your commitment, support and work ethic. Respect must be mutual in order for the relationship to flourish successfully.
