Selecting Developer, Master and Unit Franchisees

There is general consensus amongst franchisors that the recruitment of good franchisees is the most difficult and most important aspect of franchising a business. It can easily be a case of "Marry in haste, repent at leisure". The relationship between a franchisor and its developer, master franchisee or unit franchisee is a long term one. Both parties have invested time and money in it. Neither has complete control over the other. If there is a problem it can be long, drawn out and acrimonious.

There is no perfect answer to recruiting the right franchisee and franchisors use a large variety of techniques ranging from psychometric testing to a basic "gut feel".

However, there are some basic points that can usually be taken on board by new franchisors in their recruitment practices.

The most common mistake made by new franchisors is to be in such a hurry to recruit the first few franchisees that, they compromise upon the criteria that they have decided upon for their ideal franchisee profile. Obviously the ideal franchisee profile needs to be realistic and flexible to a degree but it should not be totally ignored as soon as a potential franchisee with money to invest walks through the door.

It is understandable that a new franchisor, having invested a considerable amount of money in a concept is very keen to begin to see a return on its investment. However, it must be wary of making easy recruitment that will take up far too much of its time and energy two or three years down the path.

It is not unknown for new franchisors to give their first few franchisees "sweetheart" or "honeymoon" deals. It is acceptable to recognise the great degree of risk that the first few franchisees take by investing in the franchise, but it is a mistake to give too good a deal as there are likely to be the cause of friction between the franchisor and later franchisees the future.

It is important that the franchisors know where the franchisee get its funding from and the terms of any repayment, so that he can be satisfied that the franchisees personal circumstances do not make the franchise an untenable business proposition.

Most people have a "comfort zone", a level of income above which they are not sufficiently motivated to increase the turnover and profitability of their business. The franchisor should try to identify whether or not a franchisee's individual comfort zone is too low for the particular franchise.

It is important that a franchisee has the full support of his/her family. The franchisor should therefore ensure that it properly examines the domestic situation of any potential franchisees.

The health of a potential franchisee is very important and so a medical report should be a requirement of the franchisor. A seriously ill franchisee can impose substantial burdens on the franchisor.

A visit to the franchisee's home is highly desirable - it will say so much about his approach to life and probably business. If it is clean, tidy and well presented it is likely that his business premises will be the same. If it is dirty, untidy and badly presented one should not be surprised if his business presentation turns out to be the same.

If a potential franchisee is too entrepreneurial this can cause substantial problems for the franchisor. A real entrepreneur will find the disciplines of franchising far too strict and conflict with the franchisor is inevitable. Energy and drive is essential in a franchisee, but so is the ability to work within a system - a quality which few entrepreneurs possess.