Do Business Well

Tip from a practitioner

Adhere to the specifications of your formal franchisee profile, exercise restraint and sooner rather than later, the right candidates will come along. You can rest assured that in the end, your network will be stronger for it.

Careful evaluation of every prospective franchisee is extremely important. Skillful interviewing can assess the suitability of an applicant purely from a business point of view. Providing extra training can make up an applicant’s possible shortcomings in this department, or, should he lack basic administrative skills, by encouraging him to attend some business courses such shortcomings can easily be overcome. There are two areas of much greater concern than a mere lack of basic business skills, however, namely:

• A history of dishonesty; and
• Financial ineptitude.

Personal references, however glowing, prove little beyond the fact that the prospect knows someone who is prepared to speak well of him. Unless the referee is known, such testimonials are of little practical value. However, the picture emerging from investigating the previous seven to ten years of the applicant’s business life should serve as a good indicator of his business ethics and stability.

Personnel practitioners believe that “past behaviour predicts future behaviour” and there is much merit in this. Protestations to the contrary notwithstanding, people are unlikely to change dramatically, certainly not without the help of in-depth psychotherapy which would have to extend over several years, a less than practical course of action in a business environment.

If an applicant refuses to authorise an in-depth background check, or is reluctant to provide a reasonable amount of personal information, negotiations should be discontinued. Perhaps he is just being difficult, the more likely explanation would be that he has something to hide. Either way, you would not want him as a member of your network.

n We have said repeatedly that successful franchising is based on relationship building, and honesty is an absolute prerequisite. This holds true not only for prospective franchisees, but for the franchisor as well. Prospects worth having will not expect your operation to be perfect in every respect, but they will want you to be candid with them.

Initially, this requirement would extend to the total amount of investment required, the realistic earnings potential of the franchise and the amount of work the franchisee will have to put into the business before he can expect to generate adequate returns.

The prospect will also expect, with some justification, that the franchisor’s financial affairs are in order and that his administration is up to date.

One more thing: Make sure that your company-owned stores operate in accordance with the stipulations of the operations manual. There is nothing more disconcerting for a new franchisee than to be taught one way of doing things, only to discover during practice sessions that the staff in the franchisor’s company-owned outlet either use unauthorised shortcuts or do it differently altogether.

Possibly related posts: (automatically generated)
Franchisee Selection Tips

• Some Franchise Terminology
• What does a Franchise Agreement cover?
• The Fact of Franchising
• Relationship Franchise Agreement - Operations Manual
• Putting the Franchise Package together
• Poor Choices
• Franchising Disadvantages Part 2
• Is a franchise the optimal solution? From the prospective franchisee's viewpoint
• Investing in a franchise: Take it slow
• Franchising Disadvantages Part 1

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