It's all about the people

Forget about ‘Location, Location, Location” it’s all about “People, People, People” when it comes to what contributes most to the success of a business says Nick James of franchise consultants, Franchise Central.

With over 17 years in the franchising industry, Nick has identified the critical characteristics common amongst high performing franchisees.

What one thing would most franchisors change about the early years of running their business as a franchise? In almost every case, they will tell you they would have paid closer attention to the type of people they selected as franchisees. Why? Because it is the people in the system, and not the system itself that really defines how successful a franchise will be.

But how to select the right franchisees and what are these critical characteristics that make a great franchisee? “Interview them using behavioural style interviewing techniques.” says Nick James.  “You need to give the interviewee some common situations that franchisees find themselves in and ask the franchisee how they would resolve the problem, or simply how they would react to the situation. If done effectively, behavioural style interviewing can give you a tremendous edge. You will have some idea how the candidate may react in given situations. However, that still leaves some doubt since candidates can often ‘talk the talk’, but cannot ‘walk the walk’.”

Many franchisors have therefore taken the additional strep of using personality profiles, however it has been found that they do not work for franchising. Nick James says “It’s simply because it’s not the right tool for the job. The developers of personality profiles take a tool which may work very well doing exactly what it was originally designed to do – describe a personality, but then try to shoe-horn it into the franchise community and tell you that it will predict how well a potential franchise candidate will do. Most often, all the franchisor gets out of the deal is a bad taste for any kind of profiling tool. A personality profile cannot determine how successful a person might be at a franchise.”

Several key elements shared by successful franchisees and in order of importance they are;

1. Attitude towards employee involvement

The most important key element in predicting how a franchisee will actually perform is their attitude towards and about their employees.

A franchisee who believes that employees are a valuable asset to the business rather than an expense, the business will tend to do better this is because if employees are treated right they will treat customers right who are most likely to return due to the good customer service.

2. Positive attitude for success

Individuals who believe things will work out for them and have a positive attitude towards life, success and business tend to do well.

We all know people who have all the opportunity in the world but because of a poor attitude and a tendency to see the clouds rather than the silver lining, don’t progress very far. People with negative attitudes often do not accept responsibility for their own successes or failures; it is always ‘somebody else’s fault’ which can often translate back to the franchisor.

3. Independence

The more independent the individual, the more entrepreneurial they are. However there is a balance.

A potential franchisee who is too entrepreneurial may get bored and attempt to find excuses to get out of the system, or they may stay and start trying to change the system, whilst suggestions are always a good thing for the growth of the system as a whole, someone who will be making big changes to suit them without consulting you first are not ideal.

Selecting people who are not entrepreneurial enough can be a huge drain on the company’s resources. Such people like to be in constant contact with ‘head office’ and will seek approval for every little change they are contemplating.

4. Sales orientation

Franchisees need to feel comfortable selling and marketing their own products and services. They don’t need to be hard-core salespeople who really love selling door-to-door or any other competitive selling, they just need to be people who enjoy talking about their business and the products or services they sell to anyone in their day-to-day life – both inside and outside of the business. These people also need to feel comfortable in seeking out new ways of marketing their products.

5. Social orientation

Social orientation focuses on how comfortable the franchisee is when dealing with a lot of people on a regular basis. Franchisees that don’t enjoy this constant interaction tend to become stressed. This often leads to rudeness to customers and employees which is not the way towards building a great business. However, it is also possible for people to be too outgoing, but the penalties of being too introverted are far greater.

6. Drive

Many franchisors like to believe that drive is the single most important characteristic for success, but unless a franchisee has the requisite strengths in the other key elements listed above, the level of drive will be irrelevant.

We have all heard of people with high drive levels who end up going nowhere. That is because, although they put in the initial effort that’s needed to become successful, they end up alienating their employees, customers and friends because they are always pushing others to keep up with them.

Without the moderating influence of believing that customers and employees are critically important in their own right and that they all have important things to contribute to the business owner’s success, all the drive in the world will not take them where they want to go. These are the people who need to learn something extremely important, and that is – People matter most. No matter what business you are in or what products or services you sell, unless you treat people with the respect and trust that you deserve, long-term success will be a very elusive thing.