5 ways you can stand out from the crowd as a prospective franchisee
While finding the right franchise can be difficult, equally tricky is ensuring you'll be selected. The bfa's Kelly Blackmore-Lee shares how to make your mark
Good franchisors are discerning about who they want as franchisees and highly selective when it comes to who can join their network, with figures of less than 2% of enquiries being accepted as franchisees fairly commonplace.
So, if you’ve found a brand you like and you dream of investing, how can you make yourself known as a serious prospect and a great potential franchisee?
I met with hundreds of prospective franchisees in my previous positions with national retail brands. The good ones stand out quickly from the rest and they’re the ones that you focus on as a franchisor.
Here are five ways you can make your mark during meetings or discovery days.
1. Do your homework
You should learn everything you can about the company before deciding whether or not to meet with them, such areas to focus on include:
- When did the business start and are the original owners still involved in it?
- If possible, download the company accounts and check the financial viability of the franchisor to make sure they have the funds to support a franchise network
- Find out their market stature – whether or not they are the leader in their field, or are newer to the industry
- How many franchisees do they have and how long have they been running a franchise operation?
- Who is the competition? Are there lots of similar businesses in your locality and therefore will it make launching your franchise business more difficult?
Finding out everything you can about the business will not only help you decide whether or not it is the right network for you; it will also make you look like a serious prospect to the franchisor.
Meeting them is very much a two-way process: you are interviewing the franchisor but they are assessing whether or not you are suitable for their brand and network. You need to stand out!
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2. Understand business ownership
You’re looking to become a business owner – which involves hard work. Your attitude and aptitude are both crucial elements of success: make sure you are a doer and not a dodger!
The franchisor will need confidence that you will ‘do’ the work – be the first in/go the extra mile/wear all hats in order to make your business a success. They are trying to find out if you have the ‘X factor’ over and above having the financial capability to start the business.
3. Ask questions
When you eventually meet with the franchisor to explore the opportunity further, have a list of questions that you want to discuss at the meeting. Being as prepared as possible will give the right impression that you are serious to the franchisor!
Write down the answers too as you will be given a wealth of information during the meeting or open day and will need to review and digest everything afterwards properly. Some suggested questions that you may wish to ask are:
- What are the projections given for the franchise and how many franchisees are meeting/exceeding and failing the projections?
- How many franchisees have failed or been terminated in the last year or two?
- How many franchisees have not been renewed, for any reason?
- Are they currently in dispute with any franchisees?
- How many franchisees have sold their business and for what value?
- What is the initial and ongoing support and training?
- Is there any marketing and advertising support to launch the business and on an ongoing basis?
- Are there any ‘hidden’ costs – such as a mark-up on goods or a marketing levy on top of the management service fee?
- Ask how the franchisor stands out against competitors and if any extra support is offered in your region if there is stiff competition
- Ask to speak to franchisees in the network as they will tell you exactly what it is like to be a franchisee of the brand, what support is offered, whether they are doing as well as they thought they would.
4. Understand franchising
Franchisors want to have confidence that you really understand their business model and what it means to be a franchisee. You are entering into a legal agreement with them for a contracted period of time and therefore it’s a big decision – for both of you.
Any franchisor worth joining only wants people who are likely to succeed as that is how they make their money: they only profit when their franchisees profit. So they do not want to waste time and effort signing up someone that actually isn’t suited to being a franchisee and following a model, or is averse to hard work!
Be clear about what franchising is and the daily operations involved in running the business, including the systems you’ll be expected to learn and follow.
5. Tell them!
After all is said and done, if you want to be a franchisee of that brand, have done all of your homework, researched the area and decided you want to proceed: tell the franchisor you want it and you are the right franchisee for their network!
Don’t be shy in making sure you stand out, showing you are keen and passionate goes a long way.
Kelly Blackmore-Lee is head of compliance and finance at the British Franchise Association (bfa).