Identify the perfect franchise for you! Take our short quiz Take our free franchise quiz!
Identify the perfect franchise for you! Take our short quiz Take our free franchise quiz!

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.

Can an Adult Franchise be Tasteful?

The brand of adult shop that the newlywed couple launched after returning from a year-long tour of duty in Iraq was inspired by what made them uncomfortable about other adult shops.

SBA Loans - Still Available?

There’s been a lot of negative news these past few weeks related to business lending. You’ve probably heard there’s a credit freeze and you may think that means nobody’s lending. But Don Johnson, owner of Diamond Financial Services, New Jersey, says that’s a misconception. “Our company works with over 25 lenders so we really know what’s going on with the state of SBA and franchise lending. We’re prequalifying a little more carefully, but our success rate is still high. In the media it’s all doom and gloom, but loans are getting approved. You just have to know how to do it. Most people don’t know how to do projections or put together a loan package. Over 80% of loans get declined due to packages that aren’t complete or correct. And the rest is simply not going to the right type of lender. The money is out there, you just have to know where to go.”

Know Before you Go – Non-Compete Provisions in Franchise Agreements

In general, non-compete provisions state that the franchisee will not, during the term of the franchise agreement and for a reasonable period thereafter (typically two or three years), own or be involved in any “competitive business.” What constitutes a “competitive business” will vary from franchise system to franchise system, but most franchisees can generally expect to be prohibited from taking part in any business that offers goods/services that are either identical to or competitive with the goods/services offered under the franchise system. Non-compete provisions must be limited in geographic scope, and generally cover a set radius (usually somewhere around 5 to 25 miles) around the former franchised outlet, and possibly also the outlets of other existing franchisees.