It’s tempting to sign all the entrepreneurs eager to become your brand’s franchisees with checks for the franchise fee in their hands. However, that would be a mistake. You would risk tarnishing your brand’s name and reputation without doing a thorough vetting of each candidate. While it might seem unimaginable to turn down a $45,000 check (or whatever your franchise fee may be), remember you are in this for the long haul. So, you will want the right franchisees on board.
The Right Persona
First, know who you want to be a franchisee and do the right things to attract those types of people, or personas. Are you interested in attracting military veterans, who appreciate following a plan to accomplish a mission within a system? Or do you want millennials, who are tech savvy and know how to reach hundreds of customers through social media? You might want a few different personas to be franchisees, which is fine. Just realize your brand might not match well with all personas, so you will need to be selective.
Just because you have several individuals representing the personas you want as franchisees does not mean they are all qualified. You will want to judge them in several areas, including level of personal background, experience, work ethic and capitalization.
- Personal background – While a well-rounded individual is often desirable, someone involved with too many extracurricular activities might not be a good fit. Will they be able to balance opening and operating a new business? Getting a franchise up and running requires a lot of time and energy.
Experience – If the candidate has experience in the industry your franchise company is part of, great! They will be knowledgeable of trends, competition and operations. They might even have some great ideas to share. But, if a candidate has little or no experience, will the training you are providing be enough to get them caught up to speed? Are you willing to spend more to get him or her trained properly?
- Work ethic – Although franchisors provide support to franchisees, getting a franchise ready to open and making sure it is running properly requires time and energy. Make sure franchisee candidates fully comprehend the expectations and are eager to do whatever it takes to be a successful small business owner. Simply asking, “Are you ready to work long hours?” isn’t enough. Most of the time, they will answer “yes” even if they don’t mean it. Ask questions that will get them to reveal how dedicated or capable they are to running a franchise.
- Capitalization – Of course, being well-funded is important – it’s just not the only benchmark a franchise candidate should have to hit. Franchisees should have enough money to open a unit and run it to profitability. They should have enough money to overcome any missteps and keep the business running. It’s vital to have each franchise candidate complete a personal net worth statement and for you to check their credit. Buying a franchise is a significant investment for the franchisee and you don’t want to see them fail. Selling a franchise is also a significant investment for franchisors as they put a lot of time and resources into providing support and training.
Winmark Franchise Partners can help you develop franchisee qualification criteria and help you develop, hire, train and audit your franchise sales people as well as design and construct the proper sales department for your brand.
We can help your business expand into a successful franchise by providing the guidance you need. As a franchise incubator, we have the knowledge and capital to get your brand on the right track. If you are interested in franchise growth, contact us at (844) 452-4600.