How do I recruit franchisees?

Of all the issues that arise for both would-be and existing franchisors none come higher up the scale than franchisee recruitment. If you are a potential franchisor you will have much work to do before placing your first advertisements and we shall explain the elements you need to consider. By Michael Way and David Tonchin, franchise consultants and mentors.

It is too simplistic to believe that those who say they want to run their own business have the confidence and ability to do so, or that you should recruit those who you find pleasant to talk to, or have (or can raise) the money to buy the franchise and set up their business.

The franchisee/franchisor relationship is long term with ramifications for both parties if things go wrong to say nothing of the effect such situations will have on your existing business.

Franchisee profile

Bearing this in mind how do we develop a franchisee profile? It is in two parts, the first being knowledge and experience. Whilst it is true that people take a franchise in the expectation that the franchisor will provide training, there are some basic skills that need to be present.

If yours is a management-type franchise then obviously some management experience is desirable which could involve staff motivation, operational experience, organisational abilities, customer relations and so on.

If it is a van operation providing a service it may be that the prospective franchisee should have manual dexterity and be accustomed to working outside in all weather, etc. As far as salesmanship is concerned franchisees with sales orientation can be taught new selling techniques, but it is often difficult to teach people with no sales experience to be successful whilst also running their business.

Above all, the candidate must have the financial capability to make the investment as without it both parties are wasting their time.

Having determined the skills required, construct a skills grid with the skills listed down the left-hand side and columns marked 1-5 along the top so you can weight each skill. This grid should be used when looking at application forms to select candidates for interview and also as an aide memoir when asking questions during the interview.

Just because someone has the necessary skills it doesn’t mean that they will make a success of a franchise.

Personal traits

The second part of the profile is more difficult to ascertain and this relates to personal characteristics. These are nothing to do with intelligence, education or knowledge, but are part of a person’s make-up.

It is not simply a subjective view of a person’s make-up and it needs to be determined by someone trained to do so. It is best done by a psychometric test designed to show up basic personality traits.

In the context of franchising, as opposed to testing for psychological investigation, the objective is primarily to give guidance as to whether the applicant would be a suitable type of person to operate under a franchise arrangement.

It follows, therefore, that a test devised specifically for this purpose is preferable to a purely subjective judgment. Some examples are coping under pressure, sales orientation, working within a framework, and whether the person is a loner or team player.

The procedure is simple and straight forward. The candidate is asked to complete a questionnaire of “mostly-true, or mostly-false” questions. This takes no more than 20 minutes. The answers are then sent off for assessment. The whole procedure is under the control of the franchisor and no one outside knows the identity of the candidate.

The same people you have identified as successful in your own experience should be tested as this will then give you the overall identikit picture, and between your own assessment and the psychometric test, you will be in a very much better position to match the right people to your franchise opportunity.

You have now completed one of the most important steps in your recruitment strategy and can begin to prepare to recruit, safe in the knowledge that you know who you are targeting.

Selecting the media

Now you know the profile of who you are looking for the next question is where and how you should advertise your franchise. The sector has its own magazines, exhibitions and web sites.

The four leading British Franchise Association (BFA) supported franchise exhibitions are in London, Birmingham (2) and Manchester and are organised by the Venture Marketing Group. You will need to be accredited by the BFA to exhibit. As the cost of the stand space, the display, and the staff to man your stand could well take a hefty chunk from your media budget you will need to plan every detail carefully.

Many thousands of potential franchisees attend these exhibitions and you will be on show with many other franchise systems so the appearance of your stand and the presentation of your franchise opportunity have to be spot on.

Advertisements

The recruitment of franchisees is now a highly competitive business and thanks to the efforts of the BFA, the banks, and franchise sites, such as this one, potential franchisees are better informed than ever before.

Your advertisement must attract attention and avoid hype. When someone sees it they will within five seconds decide whether to read on, or move to a competitor. It is obviously important to grab their attention immediately so a well written advertisement should promote the unique selling points of your franchise clearly and simply. Avoid long sentences and very small print.

A potential franchisee wants to know in a nutshell what the business is, what support is available, the cost, and the likely income. Within those broad essentials are your major selling points, i.e. a long-established business, new product or service etc, and if appropriate BFA membership.

Media budget

You are now armed with the type of person you are looking for. You know the most suitable type of media and you have a well written advertisement.

Franchisee recruitment is a long-term process and short term success is a rarity – it takes time and money. Recruitment is a numbers game, as on average for every 100 responses 10 will be suitable for interview from which, according to the national average, you will recruit one or two franchisees. It, therefore, follows that providing your recruitment efforts are well targeted, the more you spend, the more enquiries and the higher the rate of recruitment you will achieve.

Keeping these numbers in mind the media budget should be planned for 12 months with reviews every month to see which media is producing the enquiries, the quality of those applicants, and the conversion rate.

We should at this point include PR, which as a rule generates more enquiries than straight advertising, but it is difficult to get material published unless it is written by a professional and it often has to be linked to advertisements.

Selection process

The selection process begins the minute an applicant call or writes for information and continues until the commencement of training. A structured selection process will build the applicants confidence in the franchise as it is a reflection of how the franchisor runs the business.

Each stage of the process is important as you don’t want to waste time interviewing unsuitable candidates, or people who are just browsing. At some stage during the process a deposit should be sought to confirm the applicant’s commitment. There should be standard letters for situations such as sending out response packs, confidentiality agreements, and forwarding the franchise agreement to the applicant’s solicitor.

Interview

More than one interview is necessary and the applicant’s partner/spouse should always be invited as having the support of the family is essential, especially in the early days whilst the business is being established.

At the first interview, a common mistake is to talk about the franchise for 90 per cent of the time and ask questions of the applicant for 10 per cent when it should be the other way round. The first interview should last no longer than two hours. It often helps if you have a slide presentation on a laptop to show the key points of the franchise. At the end of it, judging from the response to your presentation, your questions, and the quality of the questions you are asked, you should have a fair idea of whether the application should be pursued further.

If both parties decide to proceed, it is at the second interview that the psychometric test should be given and, if satisfactory, hopefully both parties should then be ready to agree to enter into the franchise contract.

If you have been as careful as we have suggested, planned your recruitment strategy properly, dotted the ‘i’s and crossed the ‘t’s you should generally end up with a good franchisee, having avoided selling a dream and getting a nightmare in return.