A recent Australian survey, carried out by DC Strategy – the region’s premier Franchising specialist in conjunction with www.franchisebusiness.com.au , reveals that nearly half of all potential franchisees meet with 3-6 franchisors before choosing a franchise. Managing Director of DC Strategy Adrian McFedries notes, “Franchisees don’t enter the market with rigid, pre-conceived ideas, they are increasingly astute, well researched and prepared to complete the necessary due diligence prior to making the decision.”
The key implication for the franchisor is to view the franchisee recruitment process as a very dynamic and active component in the business. Research has indicated that the recruitment process is often left in the hands of the wrong people and fails to evolve with the business. As franchisees have access to far more information than ever before it increases the burden of the initial contact and early meetings. This is no rocket science but, as is often the case, the back to basics strategy of prompt calls, informative meetings and professional standards is difficult for many to sustain in business.
The Australian survey was focused on identifying the thoughts, motivations and key issues at the time of evaluation of a range of franchise systems. The results were statistically significant and, importantly, direct parallels can be drawn from the Australian data for the New Zealand market. New Zealand is equally if not more competitive than the Australian franchise market and the importance of word of mouth and a positive and professional reputation in the market has a significant impact on the future chance of success.
Another key indicator from the survey was the length of time for consideration was 3-5 months which also indicates the 3-6 franchisors considered can be over an extended period of time. There are questions as to whether the number of franchisors considered increases due to poor early experiences with some franchisors. The competitive recruitment for the best franchisees will continue to intensify over the coming years and the professionalism of the franchisor starts and stops with the initial impression gained through the recruitment phase. Review your process critically including collateral, website content and importantly the PR activities that surround the reputation of the brand.
It’s up to franchisors to position themselves in the mind of the appropriate franchisee as he/she embarks on the decision making process.
22-Aug-2008