As a franchisor, recruiting franchisees can be a daunting process. You’re putting your brand in the hands of a stranger, and getting that process right is incredibly important. In this article, we’re going to explain why you shouldn’t jump at just any investment offer, and should instead focus on finding franchisees that truly fit with your business.
Hiring franchisees is about quality, not quantity. If you have seventy franchisees, but ten of them are providing sub-par customer service, then the reputation of your franchise could be tanked within a few months. If you have seven franchisees, but they’re all deeply committed to the work, you’ll be in a better position as a business.
Focus your efforts on finding the right franchisees for your business, and follow these franchisor tips for recruiting the best person for the job, rather than the first person to ask for it. Here are some of our top tips on how to do that.
What happens when you hire the wrong person?
The franchisor/franchisee relationship is often compared to marriage [Entrepreneur Europe]. Two parties sign a legally binding contract, and then work together to build a relationship built of respect and trust which works well for everyone involved. If you fail to recruit franchisees that you can trust, that “marriage” might well fall apart, and end in “divorce”.
An unhappy relationship between franchisor and franchisee could result in:
1. Decreased productivity
If you’ve hired someone who’s unable to do the job correctly, this will have a negative impact on the franchise that they’re responsible for. While running a franchise can be a difficult task, and even the best franchisees may require some extra support, if they’re unwilling to learn they won’t meet targets and deadlines, and your franchise will suffer as a result.
2. Damaged brand reputation
This issue, briefly touched upon above, is arguably the worst outcome of a bad franchisee. People who are responsible for representing your business in a client-facing position can easily damage relationships with customers if they’re not running their business well. In turn, this will negatively impact the entire brand’s reputation. Once customer trust has been broken, it’s very hard to rebuild.
3. Financial issues
It might seem as though the franchisee would be the one to lose out financially in the event of the relationship souring, but that’s not always the case. Franchisors can waste a lot of money on training, location fit-out costs and damage control if the wrong franchisee is hired and things fall apart.
What do you do if you’ve hired the wrong franchisee?
If a franchisee hasn’t turned out quite how you’d hoped, there are several options:
1. Give them time to adjust
Running a franchise is a lot of responsibility, and it may be that your new franchisee is simply taking a little longer to get used to their new role. If they’ve only been running the franchise for a short period of time, give them an adjustment period and actively engage with them to see how you can help them overcome any teething problems. Hopefully, with some room, they will adjust and settle into their role just fine.
2. Keep the communication flowing
It’s not ideal to have to stay in constant communication with a franchisee, as you will have your own workload to attend to. However, in the beginning, you should be prepared for the fact that new franchisors might need some extra support. Encourage them, offer them advice, and give them ample opportunities to prove their worth.
3. Terminate the contract
If you’ve tried everything, and things aren’t getting better, it might well be time to terminate the contract. The process of franchise agreement termination must be completed carefully, as it can result in legal action if you do it wrong. In short, to terminate the agreement, the franchisee must have breached a clause or made a ‘serious repudiatory breach’ (which would have to be decided by the courts). Examples of this kind of breach include:
- The franchisee doesn’t have the right licenses, having claimed to.
- The franchisee has committed a crime.
- The franchisee hasn’t paid royalities due to the franchisor.
- Since starting their franchise, the franchisee has become bankrupt or insolvent.
- The franchisee has ignored franchisor instructions on location/branding/operations.
>> Read more:
What makes a good franchisee?
Now that the repercussions of choosing an unsuitable franchisee have been carefully covered, it’s time to move on to what makes a good franchisee. Though the requirements will differ between sectors, there are certain personality traits/employment experiences/pre-existing skills to look out for during the recruitment process.
At Driver Hire, our top performing franchisees are all highly self-motivated, ambitious people with a very positive outlook and a ‘can do’ attitude. They are good team leaders, financially astute, IT-literate and well-organised. From a customer perspective they’re great at building business relationships and inspiring the confidence of customers. Without exception they are all passionate about the business and have a ‘winning’ mentality.
Aim to recruit a franchisee who:
- Is reliable
- Comes with glowing references
- Has proven leadership skills
- Displays solid judgement
- Is willing to learn
- Is hard working
- Has great communication skills
- Is fantastic at networking
- Shows good financial awareness
- Can delegate effectively
- Is willing to ask for help and support
>> Read more:
- 5 Qualities of a Successful Franchisor
- 5 Reasons Why A Strong Franchisor-Franchisee Relationship Is So Important
- 5 Ways to Keep on Learning as a Franchisor
- Franchisor Tips: 6 Mistakes to Avoid When Running a Franchise Network
- The 8 Primary Roles and Responsibilities of a Franchisor
- Franchisor Tips: 10 Traits That Make a Good Franchisor
- Nine Reasons Why It’s Important for Franchisors to Visit Franchisees
How do you find a good franchisee?
When looking for franchisees who fit your bill, you should take your time. Hiring new franchisees is an involved process, and if you rush it, you’re far less likely to get it right.
Make sure that you DON’T:
- Fail to identify what you want/need - Be sure to set some time aside to carefully consider who would actually be a good fit for your franchise. Make a list of required experience and desired personality traits, and compare this list to each investment candidate.
- Make panicked recruitment decisions - It’s easy to say yes to someone who’s offering your brand a large amount of money, but don’t be so desperate to expand that you welcome the wrong people onboard.
- Fail to learn from past mistakes - Like most, your business will have made mistakes in the past. Think carefully about what they taught you, and use that information to learn, grow, and ensure that you recruit the right kind of franchisee.
Make sure that you DO:
- Advertise your available franchising opportunities in the right places - The better you advertise, the more prospective franchisees you’ll find, and the wider the pool of choice will be.
- Prepare yourself for the interview - Take the time in advance to really consider what you need to know from potential franchisees. Write down your questions, and ask them in a clear and concise way that doesn’t overwhelm with too much information at once.
- Ask for a credit check - This is a really important part of the process, and as a franchisor, you’re well within your rights to ask. Checking the credit of a potential new franchisee is the right business move, and if no issues come up/any issues are mentioned ahead of time, your candidate will prove themselves to be honest and reliable.
Passionate, driven franchisees are out there, waiting for you
When the franchisor/franchisee relationship runs smoothly, it can create financial and professional magic. Though finding the right franchisees for your business can be a time-consuming and involved process, the end results make all the effort worth it. Browse Point Franchise’s wide range of articles to discover all kinds of helpful franchisor tips.
Lily Sweeney, Point Franchise ©