How to avoid the wrong franchisee

Finding a business partner is much like finding a life partner – if you are stuck with the wrong one both parties could suffer.

So how do we know when we have found the right candidate? Of course, there isn’t a universal law since the concept of ‘the right one’ is interpreted differently by different people. However, there are a few things to keep in mind when considering a franchise partner.

How do you know who the right franchisee is?

How do you know who the right franchisee is?

First, make a psycho-demographic profile of the person in search. It sounds harder to do than it is. It is actually quite easy. Start by writing down everything you might want in a partner. You might not know what it is you are looking for until you see it in a person but give it a try. Doing so will allow you to form a vision of the candidate. The franchisee you end up choosing will not meet all the criteria on your list but it’s a good way to star your selection.  

Not all candidates will fit your franchise concept. Each franchise model is unique and so are franchisees. Think of it as a marketing transaction. Each part has its demands and can provide certain supplies. When you have what a franchisee is looking for and vice versa, we have a match. The key to success is bringing together compatible candidates with your franchise model.

The majority of the franchises require the franchisee to follow a proven system and to collaborate without unnecessary alterations. Candidates should be followers who are OK with playing your game. There are entrepreneurs who find it hard to follow the rules of someone else. Consider whether the candidate is a risk-taker or risk-averse? Are they ambitious and result-oriented? Are they good leaders? Do you need them to be any of these? If you offer a franchise where entrepreneurs work by themselves, leadership is not a relevant characteristic.

Turn to a consultancy firm for advice. They use tests that can estimate franchisee compatibility in a more-advanced way. Professional consultants can also help you contact candidates who share your business vision since they keep a database of entrepreneurs interested in buying a franchise.

Research your candidate’s background thoroughly. If you find anything suspicious don’t hesitate to talk to them. People are consistent in their behavior. If you find a pattern that concerns you, that might be an alert signal. You don’t want to invest any of your money or time to train a candidate who will give up when it gets hard.

History shows that it makes a difference for franchisees’ success whether they are supported by their families or not. If a family conflict arises and franchisees cannot operate properly, your business suffers. Owning a franchise, especially in the beginning, requires long working hours and takes up personal time. Family members could feel neglected that their spouse spends more time at the office or at site instead of at home.  This is an avoidable mistake that could cost you a lot of money.

Check whether the candidate has the resources to operate a franchise. Even the best candidates will stumble if they are not financially stable. You can ask for minimal financial requirements that candidates have to meet in order to open a franchise.

Last but not least, in order to compare candidates accurately, use the same characteristics. Prepare questionnaires they can fill in. This will make your selection faster and more consistent. Get all the information you can to make an informed decision. You never know what might be relevant to your final choice.