Building a strong franchise group is clearly what all franchisors want to achieve. So what makes a good franchisee?

Equally, the perfect franchisor is what every franchisee hopes to work with. So how do they find each other?

And what makes them compatible? Research undertaken by Centre PhD graduate Dr Stephen Bennett explores this issue.

Desirable Franchisee Traits

An initial requirement of franchisors was that franchisees have the capital to pay the purchase price for a franchise unit, or that they be able to obtain debt financing to cover the purchase price.

Following that, the most prevalent (desired) attribute is that franchisees must have drive and determination to succeed, while being passionate about the franchise system.

While business acumen was the second most desired quality, individual franchisors differed in their definitions of what business acumen actually was, which makes it difficult for franchisees!

Customer relations were considered to be of similar importance as business acumen, because of the need to communicate effectively with customers.

Then industry experience and/or academic qualifications, which are seen as a prerequisite in order to operate in some franchise systems, especially if the are necessary to conduct business (e.g. pharmacies).

Respect for the system by franchisees was seen as being fundamental to the successful operation and expansion of the system as a whole, with honesty and integrity viewed more as core values of individuals, rather than desirable attributes.

Desirable Franchisor Traits

Research was conducted from a franchisor perspective – what they think franchisees are looking for:

  • Support in running their business is believed by franchisors to be the most important quality that franchisees are seeking, particularly with the initial training when starting the business. To assist franchisors (and franchisees) with franchisee training the Centre has just released new Franchise Business Management Essentials eClasses.
  • A return on franchisee investment was ranked as the second most important factor. However, franchisors had different experiences with prospective franchisees about their expectations for a return on investment. Security within that investment was also ranked highly.
  • Being their own boss was thought to be a motivating reason for individuals to join a franchise system, which is reflected in the tone some advertising tends to take!
  • Life style was seen as the ability to work flexibly by adjusting their work hours to accommodate the pursuit of leisure activities when they wanted to, which goes along with being their own boss.

Recruiting Franchisees

When it came to methods of recruitment, most common sources among the respondents were:

  • franchising trade shows,
  • company websites,
  • newspapers; and
  • current franchisees.

However, some of the larger respondents had begun to use public relations specialists with some success.

There appeared to be a trend among some franchisors to use profiling for vetting potential franchisees as well as for hiring of internal staff.

Franchisee recruitment opportunities

With the current ageing of Australia’s population and retirements, there are opportunities for employing mature, experienced individuals as franchisees.

Conversely, there may be suitable franchisee candidates in the 20-30 year age bracket who would appreciate the opportunity of being in business, creating wealth and developing professionally.

Research also suggests that larger and more successful systems are enjoying ongoing recruitment success, owing to their experience in targeted advertising, as well as the size of their advertising budget and having a recognised brand.

Smaller systems may be able to improve their results by implementing a system of inquiry tracking, thus enabling more accurate targeting of their recruitment advertising.

In order to differentiate themselves, franchisors need to develop their own unique profiles of what their system does, as well as what are desirable franchisee attributes for their system.

This profile should also inform potential franchisees about the franchise system business opportunities, both now and in the future.  This may include paths towards multiple-unit ownership.