What if your ideal franchisee doesn’t exist?
When I attend expos and events I am told again and again, ‘This franchising thing is a con, my ideal franchisee just doesn’t exist’.
When I question, I am inevitably told, ‘My business is successful but I want it to grow and have other people take the day to day management away. So I went to my lawyer who drew up an agreement based on the way I run my business now’.
And therein lies the problem.
The franchise has been structured around the franchisor’s personality, skills and needs which means there is no appreciation for the desires of the end customer or the likely personality and skillset of future franchisees.
In this scenario, the likely view you have of your ideal franchisee and the way their franchised business will be run is probably very unrealistic.
2 things about developing a franchise
You need to understand two things before you decide to change your business into a franchise structure:
- You are going to create two completely new business structures from your current business, one for you as franchisor to service your franchisees and one for your franchisees to service your customers.
- And because of this, franchising is no longer a business based just on providing a service or product. Franchising is a people business and needs to be structured and managed around all people involved – your customers, franchisees and your job looking after them all as franchisor.
As franchising is a people business, you need also to realise your current business is probably not suitable to franchise and you and your personality will probably make your worst franchisee. Why?
- If you are attracted to growing a business through franchising you probably have an entrepreneurial personality with drive and the need to get things done your way. You are probably not the best at following rules. But you want franchisees who are good at following systems.
- If you have been in business for a while, your business has probably grown over time and includes a number of different elements. If you are honest, the business you run now is actually quite complex. The thing is, to be successful, your franchised business will attract better franchisees if it is based on simpler structures focused on delivering fewer services or products.
How to discover your customer needs
So, to build a successful franchise I always recommend you go through a process to work out…
What your customer really wants
This step usually involves simplification. When you take a cold hard look at your business you will usually find there are elements which are not really profitable and should be dropped.
What your franchisee will be providing
You will need to assess exactly what you want your franchisee to do: delivering a specific service or product to your customer and running their own successful business.
The level of service your customer will expect
Service levels differ with each business. A therapeutic masseuse will need empathy and care. Service from a real estate agent will be based on empathetic listening and understanding the money. Service from a rental property manager will be based on an ability to manage money, bonds, property upkeep and tenants.
How to discover your ideal franchisee
Franchisee’s likely skill set and personality
Your franchisee’s needs are usually simple to assess. Some will need to be able to do the job up front (plumbers), others will learn the necessary skills. But the personality to provide the service your customer desires is more difficult to assess. We use personality profiling (DiSC is easy to use as a start) but this is only one factor in the mix. Franchisee references and your own gut feel will be important.
Likely franchisee skills gap
Your franchisees need to be successful independent business people covering their own profits and business expenses, including payment of fees to you. Running a successful business will involve marketing, bookkeeping, administration – the list goes on.
The problem is, many people good at doing the base job, are not good at all business elements. Your remedial masseuse who needs an empathetic personality may find it impossible to the make cold calls required for marketing. As will most bookkeepers, good at figures but not so great at chatting. We are none of us perfect at everything which is where team work comes in.
What your business will look like
How you will help your franchisees
This is why most franchise groups understand that their new franchisor business exists to service their franchisees. So they do a lot to assist franchisees get the job done successfully.
In many cases today franchisees source business leads through a central website or call centre. In other instances franchisors take on some of the basic bookkeeping through a shared Xero app.
How will you, through your franchise support team, help your franchisees be as successful as they can be?
The departmental structure of your two new businesses
You will be in a position, once you have this information, to build your franchise group around the practical details of servicing your two customers, the end customer looked after by your franchisees, and your new customer, the franchisee.
And you will have a more realistic view of what your ideal franchisee will look like.