What makes a great franchisee?

By Sarah Stowe | 29 Oct 2015 View comments

Franchisees come in all shapes and sizes and achieve varying levels of success. So how can you spot the winners among the grinners?

Here are some pointers on the characteristics and behaviours of successful franchisees.

When it comes to being a successful franchisee, there's no particular route to take or educational level to reach. In fact the lack of a university education is no deterrent to achieving a strong franchise performance; the Franchise Relationships Institute found in a study in 2012 that a practical approach to business rather than a theoretical view is far more useful.

What is of value to franchisors is someone who is willing and capable of really engaging with the brand – these franchisees are likely to be higher achievers once they are in the business.

Key indicators

Greg Nathan, founder of FRI, says there are three key performance indicators that identify high achievers: customer service, financials, and constructive participation.

“People can deliver great service but don’t engage in the community of the franchise. Equally if a franchisee is making money but is miserable in the group, it all starts to unravel, they become negative.”

In a previous study, FRI found that women performed better on aspects of customer care and cultural fit in a franchise, while men had greater strength in financial issues. However, overall, “women tend to make better franchisees,” Nathan says.

A significant positive relationship was found between franchisor ratings of performance and motivations when the franchisee is driven by the desire for greater control and to meet a personal challenge, rather than seeking security and the opportunity to work with family.

Professor Lorelle Frazer agrees that strong personal drive is a highly desirable characteristic in a franchisee. “People with strong personal drive are those who set goals and achieve or even over-achieve them. They are also the type of people who don’t get despondent when something goes wrong, rather seeing the situation as a challenge which motivates them to perform better.”

Support network

It might seem obvious, but franchisees stand a better chance of success if they have the backing of their own support network (family and friends) before they start on their initiative. And being in good health is another important factor.

In fact, FRI has found that social factors are hugely significant in affecting franchisee performance; think family support, communication skills and co-operation.

“Business acumen and computer literacy would also appear to play a more important role in performance than franchisees may realise,” Nathan outlines in Franchise NZ

Franchisors should look for a franchise buyer who is able to bury their ego and just get on with the job of following the system, suggests US based Joel Libava, nicknamed ‘The Franchise King’. As entrepreneur.com reports, “People who buy franchises are not entrepreneurs, and they better know that going in,” he says.

So it’s critical for a franchisor to ensure incoming franchisees have a realistic grasp of just how much control they will have in their business. 

Franchisee background

Libava highlights the following as good candidates for franchising – individuals with a background in:

  • systems-based work
  • operations
  • marketing
  • the defence force
  • sales – if they can manage their egos

“Franchising has a responsibility to choose the most qualified franchisees, not just the ones waving a cheque in the air," he says.