Advisory Jan, 16 2012

Formulating franchisee recruitment

Every business owner aspires to take his business to the national and international level. Similarly a franchisor with the team of his channel partners better known as franchisees takes his business to the next level. However selecting reliable and capabl

By Neha Gohil
Feature Writer
Formulating franchisee recruitment

Recruiting a reliable franchisee is a tough task as it takes lot of effort and research. The franchisor needs to take care of recruitment as the prospective franchisees will trade under their brand name. This article would guide franchisors and to-be franchisors on how to select capable franchisees.

One can surely employ people for finding about interested franchisees but can not throw the final selection job on them. Tony White, Regional General Manager, Gloria Jean’s Coffee International shares: “It is always the work of the franchisor as it is their business and you cannot delegate key decisions on franchisee selection. What you can delegate is the enquiry and lead generation and qualifying of franchise candidates but you should never delegate the actual selection.”

Points to be kept in mind

Important things while recruiting franchisees involves:

  • Ensure the franchise partner knows that any business requires work – there is no plug and play business.
  • Where possible, ensure the franchise partner is engaged in the business and not merely an investor.
  • Ensure the franchise partner has realistic expectations on break even and getting returns / payback on his/her investment.
  • If you have failed somewhere and had a bad experience with a franchisee then share what that was. Be honest with the franchisee.
  • Test the franchisee by giving franchisee some tasks to complete before you sign on the dotted line.

Principals for recruiting franchisees

Financial capability: Make sure the franchise partner is a good fit financially. He should have the investment ready.

Operational capability: A franchisee should have operational capability to run the brand as desired by the franchisor.

Values alignment: Make certain the franchise partner buys into your vision, mission, and most importantly your values for making the brand global.

Franchising or a marriage

Finding the right franchise partner is as difficult as finding a perfect wedding partner.  As shared by White: “I view franchising like I view marriage – you had better choose well because you are going to be joined at the hip for a long time. If your motives are driven by cash flow shortage it is a bad excuse to get into franchising as the cheque book will drive your decision making instead of the rightness of the franchise partner. Many brands subscribe to the formula P+CB = Franchisee – that is anyone with a Pulse (P) and a Cheque Book (CB) is suitable. Beware if you go into franchising with this philosophy as you will spend a long time with the wrong partner.”

Significance of franchise consultancy

When an entrepreneur takes up franchising for expansion he has little or no knowledge of the process. For successful franchise model an aspiring franchisor needs an experienced hand. A franchise consultancy becomes useful by helping the franchisor to seek for appropriate franchisees. It ensures the franchisor is well prepared for franchise development, including operations manuals, training modules, franchise agreements, support structures and marketing materials.

A franchise consultancy would always represent the brand in a better way. It would position the franchisor and his brand that they can screen and select only the best franchisees.

Approaches to recruitment

There is a difference between the approach of a novel inexperienced and a skilled franchisor for selecting his franchisees. Here in we bring the major differences between the two:

Amateur franchisors: These franchisors are new comers in the field of franchising. Therefore they are in a hurry to make their brand a success in a short time. They may make many mistakes in selecting franchisees which can surely doom their future. Some of the approaches taken by them are:

Opportunistic: They just seek for opportunistic aspirants who have no passion for running a particular business.

Minimal Research: An amateur franchisor never does complete research of an interested franchisee.

Wrong Fit (P+CB):  Many franchisors get into P+CB = Franchisee – that is anyone with a Pulse (P) and a Cheque Book (CB) is suitable which is consider as wrong decision.

Minimal training and support: Some brands provide nominal training and support to its franchisees. This can lead to failure in future.

No selection process: Most of the inexperienced franchisors never under go a detailed selection process for recruiting franchisees. They keep anyone with the ready cash.

Secretive: Inexperienced franchisors are good at hiding their secrets, related to the brand, from their franchisees. However it can affect their brand if the franchisees are unaware of the limitations which are bound to be in the business.

Experienced franchisors: These franchisors are skilled and professional in franchising field. They never take abrupt decisions while selecting their franchisees. Moreover they do not adopt short-cuts to the road to success. They follow certain approaches while selecting a perfect franchisee such as:

Strategic: Skilled franchisors always have a business strategy according to which they work.

Due Diligence: Professional franchisors recruit their franchisee with attentiveness and carefully so they don’t make any wrong decision.

Right Fit (FC+OC+VA): An experienced franchisor follows the three key principles while selecting franchisees, which are financial capability, operational capability and value alignment.

Extensive Training and support: They provide extensive training and support to their prospective franchisees.

Extensive Financial Analysis: Professional franchisors do an extensive research and analysis of the franchisee.

Defined Selection Process: A skilled franchisor always has a defined selection process for franchisees.

Transparent: Experienced franchisors always believe in transparency. They let their franchisees know everything about their achievements and failures.

Franchisee recruitment is not any rocket science. It just needs a right perspective and helping hand to sign up with the right partner. While selecting franchisees franchisor should follow a right approach.

Recruiting a reliable franchisee is a tough task as it takes lot of effort and research. The franchisor needs to take care of recruitment as the prospective franchisees will trade under their brand name. This article would guide franchisors and to-be franchisors on how to select capable franchisees.

One can surely employ people for finding about interested franchisees but can not throw the final selection job on them. Tony White, Regional General Manager, Gloria Jean’s Coffee International shares: “It is always the work of the franchisor as it is their business and you cannot delegate key decisions on franchisee selection. What you can delegate is the enquiry and lead generation and qualifying of franchise candidates but you should never delegate the actual selection.”

Points to be kept in mind

Important things while recruiting franchisees involves:

  • Ensure the franchise partner knows that any business requires work – there is no plug and play business.
  • Where possible, ensure the franchise partner is engaged in the business and not merely an investor.
  • Ensure the franchise partner has realistic expectations on break even and getting returns / payback on his/her investment.
  • If you have failed somewhere and had a bad experience with a franchisee then share what that was. Be honest with the franchisee.
  • Test the franchisee by giving franchisee some tasks to complete before you sign on the dotted line.

Principals for recruiting franchisee

Financial capability: Make sure the franchise partner is a good fit financially. He should have the investment ready.

Operational capability: A franchisee should have operational capability to run the brand as desired by the franchisor.

Values alignment: Make certain the franchise partner buys into your vision, mission, and most importantly your values for making the brand global.

Franchising is like marriage

Finding the right franchise partner is as difficult as finding a perfect wedding partner.  As shared by White: “I view franchising like I view marriage – you had better choose well because you are going to be joined at the hip for a long time. If your motives are driven by cash flow shortage it is a bad excuse to get into franchising as the cheque book will drive your decision making instead of the rightness of the franchise partner. Many brands subscribe to the formula P+CB = Franchisee – that is anyone with a Pulse (P) and a Cheque Book (CB) is suitable. Beware if you go into franchising with this philosophy as you will spend a long time with the wrong partner.”

Significance of franchise consultancy

When an entrepreneur takes up franchising for expansion he has little or no knowledge of the process. For successful franchise model an aspiring franchisor needs an experienced hand. A franchise consultancy becomes useful by helping the franchisor to seek for appropriate franchisees. It ensures the franchisor is well prepared for franchise development, including operations manuals, training modules, franchise agreements, support structures and marketing materials.

A franchise consultancy would always represent the brand in a better way. It would position the franchisor and his brand that they can screen and select only the best franchisees.

Approaches to recruitment

There is a difference between the approach of a novel inexperienced and a skilled franchisor for selecting his franchisees. Here in we bring the major differences between the two:

Amateur franchisors: These franchisors are new comers in the field of franchising. Therefore they are in a hurry to make their brand a success in a short time. They may make many mistakes in selecting franchisees which can surely doom their future. Some of the approaches taken by them are:

Opportunistic: They just seek for opportunistic aspirants who have no passion for running a particular business.

Minimal Research: An amateur franchisor never does complete research of an interested franchisee.

Wrong Fit (P+CB):  Many franchisors get into P+CB = Franchisee – that is anyone with a Pulse (P) and a Cheque Book (CB) is suitable which is consider as wrong decision.

Minimal training and support: Some brands provide nominal training and support to its franchisees. This can lead to failure in future.

No selection process: Most of the inexperienced franchisors never under go a detailed selection process for recruiting franchisees. They keep anyone with the ready cash.

Secretive: Inexperienced franchisors are good at hiding their secrets, related to the brand, from their franchisees. However it can affect their brand if the franchisees are unaware of the limitations which are bound to be in the business.

Experienced franchisors: These franchisors are skilled and professional in franchising field. They never take abrupt decisions while selecting their franchisees. Moreover they do not adopt short-cuts to the road to success. They follow certain approaches while selecting a perfect franchisee such as:

Strategic: Skilled franchisors always have a business strategy according to which they work.

Due Diligence: Professional franchisors recruit their franchisee with attentiveness and carefully so they don’t make any wrong decision.

Right Fit (FC+OC+VA): An experienced franchisor follows the three key principles while selecting franchisees, which are financial capability, operational capability and value alignment.

Extensive Training and support: They provide extensive training and support to their prospective franchisees.

Extensive Financial Analysis: Professional franchisors do an extensive research and analysis of the franchisee.

Defined Selection Process: A skilled franchisor always has a defined selection process for franchisees.

Transparent: Experienced franchisors always believe in transparency. They let their franchisees know everything about their achievements and failures.

Franchisee recruitment is not any rocket science. It just needs a right perspective and helping hand to sign up with the right partner. While selecting franchisees franchisor should follow a right approach.

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