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What Do Franchisors Look for in a Franchisee?

Oddly, there seems to be a prevailing public misconception that becoming a franchisee is a simple matter of picking the model you want and then paying for it. Franchisors are (and absolutely should be) very selective when it comes to choosing who does and doesn’t get to join their network; the future success of the brand depends upon it. This article looks at some of the factors franchisors look at when choosing franchisees.


Firstly, they have to believe you are going to be suited to self-employment. It’s not for everyone.  If you are used to a steady salary every month, paid holidays, an expense account and sick pay, the realities of self-employment can come as quite a shock! It’s a level of responsibility that most people would rather not have. In most franchise models is not simply a case of doing a good job from week to week; you’ll often need to learn to wear a menagerie of hats from sales and marketing to HR and credit control. It’s worth noting that in most instances the more of these functions the franchisor provides for you, the more you will pay in fees etc.


Do you have the support of those closest to you? Potential franchisees are often puzzled that franchisors involve spouses and partners in the early stages of selection, but it is incredibly important that your family is 100% behind you. When you are building your own business it’s almost impossible to simply leave it behind you at 5.30pm and head home without thinking about it again until 9am the next day. Long hours are pretty much mandatory, working weekends is common, forgoing family holidays and new cars is the norm until you have firmly established your business and made it profitable. Don’t get me wrong, the hard work and sacrifice should be well worth it in the end, but let’s just say an understanding partner is invaluable if not essential!


Can you follow a system? The secret to franchising is that the franchisor has developed a set of systems and procedures, which if followed properly should make the enterprise successful and profitable. There is little room therefore for the true entrepreneur who will inevitably want to go off on their own direction, changing the model and ignoring procedures. This is not to say that franchisors are looking for robots; but following the system and respecting the brand are non-negotiable.

Can you sell? There’s really no escaping this one when you have your own business. Sales runs through the heart of any business – you need it to find and keep new customers, borrow money from the bank, outsmart your competitors, hire the best staff, negotiate with suppliers or property agents –the list goes on. Your franchisor will help you get better at selling, and practice as they say makes perfect, but a prospective franchisee who is terrified of sales is unlikely to make it passed the first interview.


Do you have sufficient funds? Banks like good franchise models, and when presented with a great business plan from a strong candidate hoping to buy a franchise they know and understand, they have been known to lend up to 70% of the total set up and purchase costs. Even with that kind of lending support, you will still need some degree of liquid capital and it’s vital that franchisor and franchisee go into the venture knowing that the money is there to support the business until it is profitable. Cash is king as they say, and a responsible and ethical franchisor will want to make sure you have what they know you will need.


Lastly, the franchisor will need to be satisfied that they can work with you on a personal level and that you will integrate well into the existing network. Conflict is to be avoided at all costs in franchising as there is rarely a winner and the time wasted on it is never repaid. Equally and for the same reasons, you need to consider how you will work with the franchisor - you don’t need to be new best mates, but you should be on the same page ethically. If it doesn’t feel right at the beginning, then my best advice to both sides is to walk away.


If you are serious about investing in a franchise then like any big decision, you should go into it with your eyes wide open. There is plenty of great advice out there to help steer you in the best direction and the rewards when you get it right can be plentiful.

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