#FLAsia2010 Special 3: A few non-negotiables for franchisees

22 10 2010

If you are a Franchisor or, indeed, an intending Franchisee, there are a few things you need to know about franchisees. The promise of franchising is sometimes stated such that it sounds like “anyone can be a success as a [insert product or service here] franchisee!” It just ain’t so…

A particular franchise may have special requirements, but here are some pretty universal ones:

a) a funadamental belief that there is one right way of doing things and that is the way we do it. The person who is happy to be situational or to keep returning to the blank sheet of paper or run a different business on Wednesday from the one they ran on Monday may be all kinds of things – but a successful franchisee won’t be one of them. Business format franchising is a “one right way”  business model, and if your prospective franchisee can’t handle that, stay clear.

b) High energy levels. Real franchises don’t promise great returns for no work; they promise predictable returns for hard work. The franchisee who needs lots of down time for reflection and recovery will struggle to make a success of the business.

c) Attention to detail. Big picture players need not apply; the big picture has already been dealt with by the franchisor. What a franchisee needs is to execute the plan with fanatical attention to detail.

d) Attention to the numbers. Many people run their businesses by instinct. This doesn’t work for franchises: a proper franchise model includes clear financial performance indicators and the franchisee needs to pay constant attention to actual performance against these standards; only by reacting at the first sign of divergence in the numbers can the franchisee and their business succeed.

e) Attention to people. Franchisees mostly have to manage staff; they all have to delight and satisfy customers. Unless you have a franchise that services autonomous robots, you have better find franchisees who pay attention to people issues, and not just executing tasks.

That may seem a daunting list, but it shouldn’t. Franchising isn’t for everybody; it is for a sizeable part of the population, whom we have just described. And the good news is that this isn’t down to guesswork; all the factors I have described are objectively measurable. If you don’t know how, we do: contact John Ong on john@consultft.com or tweet me @jonmkiwi