Know choice

Although each franchisor will have its own criteria for selecting franchisees, there are nevertheless certain qualities which every franchisee is expected to possess. The prospective franchisee should take into consideration any special characteristics which may be essential for a particular franchise (such as the ability to absorb technical know-how or the ability to manage people). The art of selecting the right franchisee goes beyond merely selecting the right person for the job. It involves the ability on the part of the franchisor to select the right person for the right business.

Specific requirements for specific businesses apart, a number of qualities emerge which can be said to be common to most selection criteria. These can be broken down into the following broad categories:

l    Health
l    Financial resources
l    Experience
l    Competence
l    Management skills
l    Independence
l    Integrity
l    Compatibility

If one looks at the various statistics for franchising, a vast majority of franchisees work very hard, usually long hours, and make a comfortable living. A small minority make a fortune and a somewhat larger minority find that they are struggling. 

Given that many franchisees have never owned a business of their own prior to becoming franchisees, the strain of running and managing one's own business can be considerable. 

Also, depending on the franchise, apart from the physical strain involved in working long hours, there may be additional demands on a franchisee if the nature of the franchise involves a great deal of physical activity, such as lifting or carrying heavy loads or being on one's feet all day. A franchisee therefore needs to be sound in body and mind, although that in itself will not be enough. Franchisors do not take kindly to a franchisee who is too frequently away from his business due to ill health. Indeed, a small number of well-advised franchisors require franchisees to undergo an independent health check before being accepted.

The fact that a majority of prospective franchisees have had no previous experience in the trade or business of the particular franchise for which they are applying is seen by most franchisors to be a positive factor. This is because it makes training a franchisee that much easier.

Indeed, some franchisors specifically exclude applicants who have prior experience in their type of business. This is because they wish their franchisee to do things the franchisor's way and not in the way in which they may have learned elsewhere. The problem is an obvious one, in that it is very difficult, if not impossible, to un-train a person. 

One of the most difficult qualities for franchisors to determine is the degree of independence which a franchisee should possess. A franchisee must be programmable but must not, however, be a drone, otherwise he will in effect have become an employee of the franchisor. A franchisee who strikes the balance between the two is more likely to be successful.

The idea of having a franchisee profile and selection criteria are all very grand. They certainly make for good business practice. However, franchisors come in all shapes and sizes, some are more mature than others, some have deeper pockets than others etc. Established franchisors with a well-known brand will attract franchisees as a matter of course.  Relatively unknown franchisors or new start-ups have a tougher time. 

Franchisees need to be aware that if it is too easy to join a franchise then quality is being compromised and a price will have to be paid. Generally speaking, the more difficult the criteria, the better the quality of the network. Franchisors clearly have to walk a tightrope between their need to satisfy their roll out programme (which can more easily be done by relaxing the criteria) and the importance of making sure that they have the right caliber of franchisees selling the goods and or services.

For franchisees, there is no adequate substitute for prospective franchisees speaking to as many franchisees as possible to assess the quality of the franchisor. They should not be afraid of judging the franchisor on quality in the same way as franchisors purport to judge prospective franchisees for quality.

As in most things, there is a scale - at the top end of which are franchisors with tough franchisee selection criteria and at the bottom of which are franchisors who rely on the "mirror test" as their franchisee selection criteria. And what is the mirror test? It is simply this - a franchisor places a mirror under a prospective franchisee's nose and if after a couple of seconds the mirror clouds over, this indicates that the franchisee is alive and breathing. And if that franchisee also happens to have his cheque book on him then bingo, he is selected! The mirror test satisfies first (in part at least) and the second criteria listed at the beginning of this article. As for the rest, it is potluck. If it doesn't work out the franchisor can always sell another franchise but for the franchisee, it could spell financial disaster.

The moral of the story is that when it comes to selection each selects the other, each needs to satisfy its own criteria and each needs to look to the long term.