Understanding the process of joining a franchise: Why it’s a two-way street

Thinking of getting into franchising? Find out what should you expect from a good franchisee recruitment process…

Becoming a franchisee is not a case of ‘sign here and cheque please’ – at least, if it is, then you should run away quickly!

Every good franchisor has in-depth, rigorous selection processes; equally, any decent franchisor will allow you to interview the company as much as the company interviews you. Joining a network is a two-way process: the franchisor is assessing your suitability at the same time as you are gauging the opportunity on offer.

Robust franchisee recruitment procedures ensure that both parties fully understand each other and that you are happy with the commitments, systems, support and operations that you are signing up to.

So what should you expect from a good franchisee recruitment process?

What to look for as a prospective franchisee

Quality control

Franchisees share a brand with other business owners. You want to ensure that the others are just as conscientious about the standards and growth of the brand as you are; therefore be wary of any franchise that doesn’t seem that worried about how suitable you are for the business.

Franchising background

A franchisor might be relatively new to the sector or might be a veteran of many years, but they should be honest about what their experience of franchising is. Ask about how long they’ve been running the business, how long they’ve been franchising, and any difficulties they have faced along the way.

The people

You will need to forge close relationships with the people behind the brand, especially in the early days of getting your franchise operational, when support is usually more intensive. You want to be sure that you trust them and can envision working with them – it will make life a lot easier for both of you in the longer-term.

Recruitment rates

Ask about how many franchisees have been recruited in the last 12 months and how many more they are looking to recruit in the next 12 months. What is important is the right level of support for the network, now and in the future. Good franchisors understand it’s about sustainability, not just a race to the biggest number – many brands purposefully recruit very limited and carefully measured numbers of franchisees per year, to ensure support remains at optimum levels as the network expands.

Franchisee access

A network’s existing franchisees are one of the best resources for your research. Don’t accept just one handed to you by the franchisor – what’s to say that they aren’t the only successful franchisee? Ask for a full list and try to speak to as many as possible and get a realistic view of what life is like in the network.

Failure rates

Less than 5% of franchises close through commercial failure each year, so it’s uncommon; but just about every network will experience a failure at some point – unfortunately franchising is not a guarantee. What is important is why franchisees fail: has the market changed; is there sufficient support; is it because the system doesn’t work; or is it that the franchisee simply didn’t put in the required level of work?

Visit their head office

Meet the franchisor at their office, which could be anything from a home-based centre of operations to a large corporate HQ. Either way it will help better inform you about the business and whether it matches with what they have told you to date.

Get legal documents checked

It is common practice to be asked to sign a non-disclosure document. However, don’t sign it unless you have fully read and understood it. You will also get a franchise agreement, which is the legally-binding contract between franchisor and franchisee. Do not sign this until you have had it checked by a professional franchise solicitor.

A UK-wide directory of these is available on the bfa website. There is no franchise-specific legislation in the UK, making the sector a specialist and niche field of legal expertise in the context of general business law. Taking the wrong advice from an unsuitably experienced adviser can prove extremely expensive.

Deposits

You may be asked to pay a deposit during the recruitment process, which is standard practice for many franchisors. If they are a bfa member this is refundable if you decide not to progress things further, minus any reasonable costs incurred; non-bfa members may take a very different approach. Get a receipt and check the conditions carefully before paying any deposit.

What you should expect from a potential franchisor

Timescales

The entire recruitment process in franchising is never just an hour-long meeting in a coffee shop or pub. Depending on the network and date of your enquiry, the whole process could range from a couple of weeks through to a year. If the process is lengthy and substantial, try not to get frustrated; instead, see it as a good quality check.

Getting personal

Don’t be surprised if your spouse, partner or a family member are invited to attend meetings with you. Franchisors frequently want to really understand you as a person and part of that can be to see if the people around you are supportive of your decision, which can be a crucial factor in business success.

They’ll want to know what you want from the business

Be sure about why you are going into franchising. Is there something you are looking to achieve? Having a clear mind about this during the interview process will help you in your conversations with the franchisor, who will expect you to know.

Exit strategy

Don’t be surprised if as part of the interview process you are asked whether you have thought about a long-term plan to leave the franchise! Some franchisors like to see if you have a plan or goal that you are working to, such as 15 years to build the business then sell and retire. You may not have a clue at this stage, but it’s worth thinking about as it will help you plan what you are looking to achieve.

Testing times

Some franchisors conduct psychometric tests on their prospects to help them assess suitability; others might ask you to spend time shadowing a current franchisee. Almost all have their idea about what makes a suitable, successful franchisee, including their background and transferable skills, so these are not things to be feared but treated as a valuable part of the process.

Questions, questions, questions

Don’t be afraid to ask difficult questions. Good franchisors will be encouraged if they see that you are taking this seriously and won’t want you to go any further if you’re not clear about what you are committing to.

Perhaps the most valuable advice is to make sure that you take your time in the recruitment process. It’s a serious commitment that requires serious consideration, and treating it as such will see you in a much better position to start building your own thriving business once you’ve found the right franchise for you.

Paul Stafford is public relations manager at the British Franchise Association (bfa).

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  1. Gareth Jones-2
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    Deposits – now that’s a real pain in the ass! Some company’s deposit requirements are so high, that is practically impossible to get a franchise. Why setting up deposit amounts so high? Can’t you just stimulate new openings with lower deposits? Franchise companies earn fair share of franchisees turnover anyways, so why burdening their budgets with insane deposits?