Six factors that make a good Franchisee:
- Have done due diligence
A key factor that makes a good franchisee is the research they have undertaken well before they sign on the dotted line of the franchise agreement. The due diligence process is so important for a potential franchisee to identify the strengths, weaknesses, opportunities and threats of a business, gain insights into the competitor landscape (both current and future), and to truly understand what they will be investing in. A robust due diligence process helps manage expectations of the potential franchisee and can assist in prioritising what needs to be worked on upon becoming owner of the business.
- Invest in staff – employ for attitude not aptitude
Many franchise systems offer solid training programs for both franchisees and their team members. Often these programs have been honed over many years and have built upon the experiences of other franchisees. With such strong processes behind them, many franchisees recruit for attitude rather than aptitude. Looking for candidates who are a good fit with both your brand culture, and your existing team, a strong work ethic, and a can-do attitude, can often prove to be more important than recruiting an employee for their technical abilities or skills.
- Compliance to brand standards
Good franchisees tend to embrace the standards, processes and policies of the franchise business -after all this is often what constitutes the investment compared to a non-franchised business. They almost always do things “by the book”. Franchisees that focus their energies on the positives and growing with the system, rather than getting bogged down in negativity, will achieve better results and can focus on the things they can control and change.
- Invest in Local Area Sales & Marketing
Which brings us to the next factor – local area sales & marketing. Franchisees with a growth mindset understand the need to undertake local marketing when they are part of a franchised brand. Local area marketing efforts can often compliment and amplify the marketing program being undertaken by the Franchisor. Franchisees who authentically engage with the local community in which they operate tend to enjoy healthy levels of brand awareness in their area, which often translates into more sales, repeat business and a loyal customer base from positive ‘word of mouth’ recommendations.
- Networking and knowledge sharing
A hallmark of good franchisees is their willingness to network with other Franchisees, and share their knowledge and experiences with their franchisee family. They regularly attend Franchisor events like conferences, cluster meetings and training sessions, and see such events as opportunities to get to know new Franchisees in the network, share stories with their colleagues, and build relationships with Franchisor staff. Importantly, they don’t view other Franchisees who they may share territories/regions with as competitors; rather they take the mindset that a win for one franchisee is a win for the brand, and thus ultimately provide their franchise business with a greater opportunity to capture market share.
- Know their numbers
This point may seem a little obvious, but it is surprising the amount of small business owners that don’t have a solid grasp on the numbers of their business. Franchisees with a learning mindset have a strong understanding of their cash flow, net income, profit & loss, sales and gross margin. Importantly, from the outset, they also have set a target figure in mind as to the amount they wish to sell their business for. Such a target provides a long-term view on how they can grow their business, and ongoing perspective (why are they in business for themselves?) that helps them get through the day-to-day challenges of running their small business, and achieve their goals.