Can you be so keen to sign up your franchise buyer that you move too fast for comfort?
Potential franchisees can be so swept up in the passion for a brand that they leap into a business opportunity without due consideration. And while that might work out, it might also lead to unhappiness and possible disputes.
Here are a few pointers to ensure you find your perfect match:
__1. Don’t rush the process
You want your franchise buyer to research the sector, research the brand and the franchisor team.
Franchise buyers are encouraged to look for strong leadership, a clear vision and strategy, investment into systems and processes, vibrant marketing campaigns and a great culture across the network.
How does your franchise shape up?
Ensure your potential franchisees do their research and have time to consider the opportunity without pressure.
2. Focus on the role
What will be the daily requirements of the franchisee’s role? Make sure the potential franchisee understands what’s entailed, and is confident this is how they want to spend the next few years of their life. A disillusioned or reluctant franchisee will have little chance of long term success and that can damage your brand.
Encourage your franchise prospects to allocate time to spend a day or a week with a friendly franchisee in your network to give them a real taste of their role and responsibilities.
3. Encourage contact with franchisees
Franchise buyers who get in touch with current and previous franchisees gain a different perspective on the franchise relationship – they learn what franchisees think of the brand, how your team runs the overall business, and uncover some of the issues that annoy franchisees.
Some franchisors insist their prospective franchisees speak to a minimum number of owners in the network and encourage them to engage with franchisees at different stages of the franchise life cycle and at varying levels of financial success.
4. Be ready to face questions
Don’t be afraid to answer the tough questions. An engaged, enquiring, well-informed franchisee is a boon to any franchise network.
Remember that franchise buyers are looking for trust and transparency.
5. Spend time ensuring the location is right
Perhaps you take on the responsibility of site selection, perhaps you allow franchise prospects to find suitable locations – either way, the right location or territory is fundamental to the success of a business. Encourage franchise buyers to seek independent information from landlords (particularly in shopping centres) and apply critical judgement to the numbers presented.
6. Don’t set up your franchisee for failure
If the outgoings are excessive, your franchisee won’t be making money. In the light of high rents and the challenge of sourcing great sites in premium positions, franchisors are innovating – changing their models and their site expectations to ensure franchisees have viable businesses.
7. Stress the importance of independent advice
Emphasise the necessity of seeking third party, expert advice from a lawyer and an accountant as outlined in the Franchising Code of Conduct.
8. Work together
If you’re responsible for recruiting, your job is to build the network of franchisees. The operations team has responsibility for getting franchisees set up, the business development managers need to keep franchisees on track.
Finding an applicant who will prove to work well in the role is the challenge so an understanding of what’s required post-purchase makes sense.
Get your BDMs and ops people on board so there’s a synergy to the process.
9. Be prepared to walk away
Remember, no-one picks a perfect franchisee every time but listen to your instincts and be prepared to keep searching.