When established franchisors get inquiries from would-be franchisees, the usual course of action is to schedule a phone call. A conversation allows both parties to determine if the potential for a long-term partnership exists.
This initial step of the vetting process is crucial, as no franchisor wants to invest time, energy and resources in a franchisee who isn’t a good fit for the franchise system. But beyond adequate capital to start up the business and keep it afloat until it becomes profitable, what should franchisors look for in franchisees?
Every franchise system has unique considerations, but when vetting franchisees, franchisors should make sure to ask the following questions.
No. 1: Why Are You Interested in this Franchise System?
Franchisees have their choice of several thousand brands and many different industries. Asking why their particular franchise is of interest can help franchisors identify strong candidates. Prospective franchisees who are gung-ho about the brand — rather than just the potential payout — typically make the best partners.
No. 2: How Hard Are You Willing to Work?
For new franchisees, 60-to 70-hour weeks aren’t uncommon. Operating a franchise in the first years takes a great deal of hard work, so franchisors should try to weed out any prospects who aren’t ready, willing and able to invest a significant amount of time and effort toward business success.
No. 3: Are You More of a Leader or Follower?
The ideal franchisee is a bit of both. Franchisors should look for people with the leadership skills to run the business and achieve profitability, but who are also capable of following the proven franchise system. Prospective franchisees who are likely to provide ideas for operational improvements are welcome, but franchisors are wise to avoid partnering with anyone who seems too entrepreneurial.
No. 4: What Are Your Long-Term Goals?
Often, the owners of the most successful franchise locations have been at the helm for years, and their performance is directly related to the expertise they gained over that time. For that reason, franchisors should look to partner with people who want to stick with the franchise for the long haul. If a prospective franchisee says they have a goal of building up the business and selling for a profit, that may be reason enough for a franchisor to take a pass.
With every new franchisee partnership, franchisors take a risk, which is why the vetting process is so important. Thoroughly assessing candidates and turning down any who don’t meet the qualifications is essential.
For expert guidance on franchisee selection and franchise system development, turn to the award-winning professionals at the Franchise & Business Law Group. Our attorneys have decades of experience working with franchisors, and we can help you achieve your business expansion goals.
With the Franchise & Business Law Group on your side, you can count on practical, forward-thinking advice that puts you on the path to success. For more information, or to schedule a professional consultation to discuss franchisor strategies for vetting franchisees, contact our Salt Lake City, Utah, office today.