Top tips for finding the right franchisees - and the ones to avoid

How to identify people who will flourish in your network - and the ones to avoid

As any seasoned franchisor will tell you, finding franchisees is easy. Finding the right franchisees is not. If you’re in the early stages of extending your business via this model, it’s vital you make good, well considered choices about who you award franchises to.

It’s far better to aim for slow and steady expansion with a strong and capable franchise network than to rush ahead with anyone who expresses an interest. This is true for all franchisors, but it’s especially important for fledgling firms. Misguided decisions can cost you dear and quickly stall your plans for expansion, as well as draining your energy and potentially damaging your brand.

What makes a good franchisee?

If only there were a simple list of ‘ideal franchisee’ traits. It would make life so much easier.

However, just as every franchisor is different, every prospective franchisee has different skills and characteristics too. It’s about finding people who have the right attitude and aptitude to work with your business offering and franchise system and make a go of it. Having said that, there are three prospective franchisee types that are best avoided:

• The entrepreneur. I’m 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 reinvent it. In some cases, it’s okay for people to add their own twist or focus, but what you need are people with an enterprising spirit, not entrepreneurial flair.

• The ‘get rich quick’ mentality. Of course, franchisees have every right to expect to make good money. But it’s important they understand and value the fact that business success takes time, effort and dedication. They need to appreciate that this is an effective route to a secure income and a chance to be their own boss. It’s a long-term investment of their working years, not an easy way to make a million.

• The shirker. Anyone who takes on a franchise needs to be prepared to roll up their sleeves, especially in the early years. Owning a business doesn’t mean endless rounds of golf, while your team gets on with the real work. Yes, as the franchise grows there will be opportunities to delegate and the owner’s role will evolve. But they must be prepared to put in some hard work up front.

Making a good match

While there isn’t a magic list of franchisee qualities, there are four ways to help identify people who will flourish in your network:

1. Make a list of the qualities you value.

Imagine you’re posting a job advert for a general manager. What would you say are essential qualities and which would be desirable or simply nice to have? Remember, no one will meet all your criteria and someone who only ticks half the boxes, but brings bags of energy and enthusiasm, could be more successful than someone who looks good on paper, but doesn’t have a strong work ethic.

Think about personal characteristics as well as previous experience or practical skills. For instance, if your franchisees need to be outgoing and build relationships through networking, you need to prioritise good interpersonal skills.

2. Consider how prospects

behave, as well as what they say. A prospective franchisee might say all the right things and have lots of relevant qualities on the face of it. But you also need to know you can work with them and that others will want to work with them too.

Look at how they treat and interact with other people, not just you as the main franchise owner. What’s their attitude like when they talk to the receptionist? Do they readily engage with your existing franchisees when given the opportunity? Think about whether they’re likely to build good, strong working relationships with customers, suppliers and future employees.

3. Check they’ve done their homework.

Any serious franchisee will check out several options before deciding which franchise to invest in. Ask which other franchises they’ve considered and if they’ve had active discussions already. If they’ve already discounted other franchise opportunities, ask why. Their answers could reveal a lot about what they value and their underlying attitude.

It’s also worth finding out if they’ve done any research on the sector you operate in or sought advice from the British Franchise Association. Good franchisees are proactive self starters, so look for evidence of this. Suss out whether they’ve done any legwork before approaching you.

4. Find out if they have a good support network.

As with any new business, setting up a franchise is hard work. Explain to prospective franchisees there will be difficult periods as they adjust to a new way of working and that it can take time to generate a profit.

Naturally, you’ll be there to advise and mentor them, but ask how they cope in times of stress and if they have anyone to turn to for support and encouragement.

Think about what you offer too

I often say the bond between a franchisor and franchisee is like a marriage. Both parties bring different qualities to the table and over the years, with mutual respect and effort, the relationship can flourish. But it must be a two-way street.

Think carefully about how your model benefits franchisees. Is it fair and is it geared to get them off to the best possible start? How extensive is your training? Do you help them get to grips with finance, sales and marketing? What about longer-term growth and development? You may still be in the early stage of franchising, but how do you expect the network and your franchisees to evolve over the coming five to 10 years?
If you want to attract high calibre franchisees, you need to be confident that you’re offering them a supportive start and excellent prospects. Explain how you will set them up for success and help them build an achievable vision for their future.

Just as you’re looking for certain characteristics, skills and commitment in a franchisee, so should they be analysing your commitment, support and work ethic. As with marriage, you need to court the franchisee or else, just when you think you’ve found a franchisee that fits, you may find they’ve decided to invest their efforts elsewhere.

Main reasons for not granting a franchise

1. Insufficient capital
2. Performance at interview
3. Lack of business acumen
4. Seemed to be just buying a job
5. Failure to turn up for appointments
6. Poor credit history
7. Inability to complete application forms
8. Lack of sales/marketing experience
9. Not suitable

Source: British Franchise Association NatWest franchise survey 2018.

The author

Nigel Toplis is managing director of multi-brand franchisor The Bardon Group