The Ideal Franchisee - The Franchisor Point of View
Successful franchises expend substantial time and resources evaluating applicants in order to find the individuals that they believe will have the best chance for success within the franchise system. The franchisors take a strict approach to approving applicants because their experience has shown them that the additional costs incurred in recruiting the highest quality franchisees (as opposed to unqualified franchisees who may join the system only to fail and close shop shortly thereafter) pay off handsomely as successful franchisees help to grow and enhance the value of the overall franchise system.
While every franchise has its own concept of the "perfect franchisee," there are some basic characteristics that nearly all franchisors look for during the franchise application process. Below is a list of some of the most commonly sought attributes:
- A person with strong motivation and the drive to achieve success.
- A person with confidence and enthusiasm for the product or service being sold, not merely a desire to make a profit.
- A person who does not have all the administrative or entrepreneurial skills necessary to start, develop and operate a viable business from scratch, and who, therefore, requires the franchisor's support (for example, a front-line supervisor or middle manager might be considered a more desirable choice than someone who has already founded their own business).
- A person who is not only good at learning new things, but who is also able to motivate and train others.
- A person with at least five years of managerial or teaching experience or other significant leadership experience.
- A person who has experience in, or a good working knowledge of, the industry in which the franchisor does business.
Of course these are generalizations. Every industry and franchise system has its own ideal franchisee profile, some aspects of which may contradict the list above. For example, some fast food franchise systems automatically disqualify applicants with a restaurant background. While this may seem counterintuitive, the thinking for these franchisors, based on years of experience, is that franchisees freshly trained in the franchisor's particular procedures and system will be more successful than those who are coming from the same industry but with different (and often conflicting) habits.
Similarly, many hair and beauty salon franchises will not recruit people with relevant skills (such as hair stylists and cosmetologists). Instead, they seek out new franchisees with a strong business background but no hair styling or beauty experience. The franchisors in this case believe that management skills, attention to customer service, and sales skills are the most important qualifications for success in their system.
Finally, some extremely stringent franchisors - such as McDonald's and Domino's - go well beyond the basic franchise forms - a questionnaire, checklist, and interview, and actually require prospective franchisees to work as employees in their system before buying a franchise of their own. Although this is an extremely time-consuming and arduous approach, the technique weeds out all but the most serious and well-matched candidates, thereby eliminating much of the risk of franchisee failure.
Knowing the attributes that franchisors look for in potential franchisees can help you ace the questionnaires, fill out the franchise forms and prepare for the franchise interview process, but before you can be sure that franchising is right for you, you'll want to read what franchisees themselves believe makes for the perfect franchisee.
How Franchisees Can Grow Their Sales
However, once the ribbons come down and time passes, franchisees begin to recognize the challenge ahead and that, in many ways, they're on their own: regardless of the amount of support their franchisor provides, the franchisee is ultimately responsible for generating sales for his or her new business.
Franchisors Exposed to Liability Based on the Conduct of their Franchisees
Facts that have been considered relevant to whether a franchisor might be exposed to vicarious liability regarding the conduct of its franchisees include:
What Happens When a Franchise Contract Ends? Obligations Upon Termination
The franchise agreement should also address who gets to use the franchisee’s phone numbers after the franchise agreement expires. Traditionally, this right has belonged to the franchisor, but with home-based businesses becoming the norm, franchisors that allowed franchisees to use their home phones or existing cell phone numbers might have an issue regaining control of this component of their former franchisees’ business presence.