10 Things to Consider when Selecting a Restaurant Franchisee
Just as great students make a great college, it takes a team of committed franchisees to maintain the reputation of a franchisor.
Let's draw a parallel between franchisee recruitment and selecting students for college admission. The laws are pretty much the same. A highly ranked college gets the cream of the applications. Students apply in large numbers and hence, the college gets to be more selective.
This unlocks a chain reaction. The college enhances its reputation year on year and committed students keep choosing it. Thanks to its reputation, the college begins to attract good teachers as well.
This constitutes a competitive advantage. It can be maintained if the college ensures that it maintains the highest standards of integrity and transparency and is seen as a trustworthy institution. Here are three actions that will inspire trust.
- Students must get admission on merit
- The teaching faculty must remain updated.
- The infrastructure must be cutting edge.
This is how Ivy league institutions have differentiated themselves over the years and what makes them so prestigious.
This is exactly how franchising works as well. Take it from someone who has dedicated the last two decades to building a franchising business on these principles. And just as great students make a great college, it takes a team of committed franchisees to maintain the reputation of a franchisor.
Here’s what you have to keep in mind while selecting from a pool of prospective franchisees.
1. The candidate must be self-driven.
He must have the hunger to prove himself in his own eyes, as well as to the world that he is a successful, capable entrepreneur
2. The candidate must be self-motivated:
Buying into a reputed franchisee is no guarantee for success. Even the best franchisee systems have their share of franchisees who don’t succeed.
The franchisee system provides the framework like a college provides the framework. The franchisee then has to work with the infrastructure provided to him, and excel. There are bound to be challenges. Even if the franchisee is failing, he has to dig deep into his purpose, believe in the system and play his part
3. The candidate must be educated:
When selecting a franchisee, look for a basic educational qualification. College education instills a certain amount of rigor and commitment in individuals.
Only a good student can appreciate ‘learning’ and become a good coach to the team that he will build as a franchisee.
4. The candidate must have requisite capital:
This is extremely important. For the first franchise outlet or center, the candidate must have the necessary capital and then some more money to get started. It is well-documented that a franchisee business gives you an 80 percent chance of succeeding. Hence, it is useful to go in with zero loans. The first year is critical; the pressure to set up a business, while having to support a family and pay EMIs can get overwhelming for anyone. A loan free franchisee can exercise financial prudence and set some money aside to support their family for the initial months. They can dedicate themselves to building the business as well as derive the satisfaction of success.
5. The candidate must be detail oriented, process driven:
I have met many entrepreneurs who want a food franchisee because they like cooking. These are not the dots to connect. A food franchisee is entirely about processes and has very little to do with your culinary skills. Those who are regimen-friendly and detail oriented will excel in franchising.
6. The candidate must be honest and value driven:
People who pay their taxes, pay their franchise fee. They understand that by investing into buying the franchise they are not doing a favor to the franchisor. They are benefitting equally by dipping into the centralized system and scalable thought process. The services have to be paid for and everyone has to make money for the system to thrive and grow stronger. In term, they will grow stronger.
7. The candidate must offer full-time commitment:
Being focused towards your business brings success. Getting a proven business model and scalable system on a platter can make you a franchisee lazy at times. But, the focused franchisee will take nothing for granted and invest into setting up multiple-unit franchises, enhancing their earning potential.
8. The candidate must start early:
The best meetings are when a parent and their ward come to seek a franchise together. The parent offers their capital and wisdom and the ward offers their energy and time. Starting early is a great advantage to scale up and become a master franchisee of a mature franchisor.
9. The candidate must be progressive:
It is extremely useful to be well-read and appreciate the larger picture; about progress, technology and where the economy is headed. This helps every franchise have the right conversations with their franchisor.
10. The candidate must be a good team player:
The beauty of franchising is the aggregation of ideas and energy. The candidate must be able to appreciate others' points of view.
These may sound like a qualitative assessment. However, Peter Drucker famously said “culture eats strategy for breakfast.” This is what franchising is all about.