Is it ok for Franchisors to be picky?

It is so easy as franchisors to be primarily focused on getting the sale, especially in the early stages of your franchise system. You may feel like you are in no place to be picky, or you may say to yourself “I just need to get locations up and running now, and then I can focus on being picky later.” However, this may not be the correct mindset. As a franchisor, it is not only ok to be picky, but it’s important.

A franchisor’s success is heavily dependent on their franchisees’ success. Not only is the success of the franchisor in the hands of their franchisees, but so is their reputation. When you are looking to sell a franchise, it is important that you are looking at franchisee candidates closely. Often the mindset is “I need to sell our business model and story to the candidate,” when really, the candidate should be the one selling themselves to you, and proving they are a good fit to own a business under your brand.

franchisors reputationIf you are not being selective with franchisee candidates, you are risking the reputation of your brand, as well as causing more work for yourself in the end. It is important to remember that if you cannot see this person fitting into your business system or your business culture, that it is ok for you to turn them down and indicate that they are not the right fit. Trying to mold and change someone into your ideal candidate will likely end in disappointment and/or failure.

Joel Libava, founder of Franchise Selection Specialists and author of Become a Franchise Owner, said in an entrepreneur magazine article, “The franchisors that have the courage to turn down a $30,000 franchise fee get it. They may just be starting out and may really need that money, but a good franchisor can see that in two years, this franchisee is going to be a nightmare.” Libava goes on to say that in many cases franchisors get a feeling from a prospect that they are not the right fit, whether it’s for financial reasons, or they are reluctant about following the system. However, franchisors often ignore their reluctant feelings and settle for these candidates to get the sale, which often results in disappointment or failure. “If you want to be successful, you’ve got to remain picky. You just can’t settle,” he said.

Some areas to focus on when vetting franchise candidates:

  1. A passion for systems and structure – Ideally, your candidates should have a leadership mentality with a passion for business ownership, but they should also be systematic and relish structure. For this reason, candidates with military experience often make for great franchisees.
  2. Finances and credit – While not the most important area to focus on, at the end of the day, your candidate needs to have the funds necessary to purchase the franchise and the funds necessary to run the business, including startup costs. Disclosing financial situations, credit, liquid capital, etc. is key prior to signing on as a franchisee.
  3. Work ethic – Of course during any “interview” situation it is not uncommon for answers to be tailored toward what the individual thinks the questioner wants to hear. Because of this, it is important to avoid simply asking questions that are expected and often have “obvious” answers. Instead, ask situational questions like, “What do you do in your spare time?” or try “for instance” questions. This will help you gauge how the person lives their life and how they’d handle actual situations.

Overall, is the candidate excited about following a system? Do they demonstrate that they are hard working? Do they understand what needs to but put into owning a business? Does their personality mesh well with the rest of your system and team? Are they financially smart? The best way to answer these questions and to really get a feel for who your candidate is, is to get to know them one on one. It is important not to ignore your gut and/or any red flags you may see. If you truly feel that a potential candidate is the wrong fit for your business system, it’s ok! Saying no to this person, although it may seem hard now, will be worth saving the hassle in the end of dealing with the consequences of allowing the wrong candidate to purchase your brand. You’ve worked so hard to build this business and create an effective system from the ground up, really it would be unrealistic to expect a franchisor not to be picky.

 Find Brothers Gutters Franchise opportunities near you! 

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