Our previous articles mainly focused on best practices to boost network performance. We believe that an effective franchisee selection and recruitment process is one of the key elements of success. Indeed, poor choices may come with bitter consequences for your reputation, the quality of your franchisor-franchisee relationships, as well as your wallet. You may already know from first-hand experience the cost of conflicts, or may have even suffered significant losses in royalty payments and market share because certain franchisees failed to exploit the full potential of their territory.
Establishing your preferred franchisee profile, evaluating prospects and implementing an effective recruitment process are simply essential to informed decision-making. When you register on FlagFranchise, you are asked to complete a questionnaire that will help you identify and prioritize your preferred franchisee profile. It will become your selection tool to find the best fit for your banner from the list of applicants looking for a franchise opportunity, aligning the skills and personal characteristics of aspiring entrepreneurs with the actual requirements and needs of your banner. One of the important factors to consider is the risk of overlooking the growth potential of a candidate simply because your preferred profile is too restrictive. You have to remember that if your franchise operation calls for specific, rare or numerous qualifications, it will be more difficult to find perfect candidates. Recruiting the best is a challenge by itself. So if your business concept or requirements are too stringent, you add another level of complexity to this franchisee recruiting challenge, potentially slowing down your network’s growth.
Your Business Concept
Let’s start with a good look at your business concept that you wish to franchise out. To be successful, your idea must be proven effective and unique in order to have a significant commercial appeal. However, some business concepts require a particular expertise or a specific training background, which limits the pool of potential franchisees and makes it difficult to find a good match. Under the circumstances, you have two options: adapt your concept or adapt your processes.
Adapting Your Concept
New franchisors should ask themselves if the skills, personal qualities, education, budget that they set as requirements may be difficult to find in one person in the territories where they plan to expand. The higher the initial requirements and the startup budget, the more difficult it might be to find candidates. However, it might not be too late to review and rethink your business formula, to adapt it in order to reduce recruitment inconveniences.
Existing franchisors can mitigate this risk by adopting a variable-complexity approach based on the candidate profile. For example, the concept may be adapted to include express or smaller franchise units available for less experienced candidates, and larger units reserved for expert franchisees. Why not start by granting franchisees the right to operate smaller points-of-service/sale and then, once they prove themselves, offer them larger, prime locations? Multi-unit franchising, which is a franchising model where franchisees operate several units, is becoming more common because of its many advantages. But we shall talk about it in more detail another time.
Optimizing Your Policies and Procedures
Adapting your business concept is one of the ways to improve the effectiveness of your recruitment efforts. You might be able to accept selection criteria that are a little less demanding and hard to find in one person if you implement practices and procedures that would make up for the lack of experience of your prospects. It may seem expensive to assign money and effort to structure your operations manual, your initial training to franchisees, and your support to franchisees in the form of ongoing coaching and continuous training. But imagine the potential ROI (return on investment) if the investment you made to strengthen your franchisee support system makes it easier for you to recruit more franchisees who reach profitability faster. The ROI can be exponential: more territories, more revenue and thus more royalties by territory, happier and more successful franchisees, etc.
In short, if you struggle to find quality franchisees for your network, our FlagFranchise tool can make your recruiting efforts more effective. We can also help you re-examine some of your methods and approaches in order to make your business concept more accessible and your network more efficient.
Sylvie Grégoire, MBA, CRHA
President, Totem Performance organisationnelle and FlagFranchise
