When I suggested that maybe it wasn’t the franchisees at fault, but rather the franchisor for selling them a territory in the first place, the reaction was shock. ‘But if they want to pay us £25k, then we aren’t going to say no.’ was the reply. Wrong. Wrong. Wrong. Wrong. Remember the phrase ‘A fool and his money are soon parted.’
The fact of the matter is that there’s a tendency amongst some franchisors, especially in the early stages of the business, when cash is tight, to sell to whomever has an open cheque book. I can understand the desire for cash and the need to rapidly achieve geographic coverage, but it is still bad business practice and will almost certainly lead to problems in the future. The franchisor will be left with large patches of the country covered by franchisees who can’t be trusted and generate limited revenues for the company. In turn, the weak franchisees will feel aggrieved, having purchased the franchise only to discover that the rewards don’t live up to expectations, blissfully unaware that their failure to prosper is down to their own ineptitude. Plus, there’s a risk that strong franchisees will become disgruntled because their neighbour is damaging the reputation of the brand.
Over the years I’ve hired a few exceptional people and many great people, but I can honestly say, I’ve never hired a complete numpty, apart from maybe the Danish intern we hired one summer. I’ve never hired anyone who is lazy, with poor quality standards and a complete inability to do the job just because they said they want to work for me, so why do so many franchisors take this approach? In my business we put potential employees through a rigorous set of interviews and usually give them a month trial to ensure both parties are culturally suited and the candidate is up to scratch.
Franchisors should apply the same rigorous selection criteria to the recruitment of franchisees. Treat every one as if you were hiring a critical new member of your senior management team and you won’t go far wrong because even though these people don’t work directly for you, they are your company ambassadors. In a traditional business they’d be your General Manager for Scotland, your Head of Sales for Greater Manchester or your MD for France. The fact that these motivated, talented individuals want to shell out their hard earned cash to join your operation is a bonus and should be secondary to whether they’re good enough to work with you.
If you’re a potential franchisee then my advice would be to steer well clear of franchise businesses that are more interested in taking your cash, than in vetting your abilities. The other tell-tale signs are a hard sell pitch that’s a little too thick and a promise of returns that are just a little too good to be true – if their opportunity is so good, then why do they need to batter you into submission. On the other hand, if they reject more potential franchisees than they recruit. If they make you jump through hoops and are more interested in your abilities and your potential, than in the contents of your bank account, then the chances are they’re a quality outfit with sound management and a bright future.
Finally, back to the business I mentioned at the start of this article, they were told by the Franchising Expert at the head office of a leading high street bank that the only thing that matters is the franchisee’s cheque clears. In my view, potentially disastrous advice. Sure, if all you’re interested in is selling franchises, not building a solid, long term business then that’s fine, take the money off any numpty who walks through the door. But then again, if this is all you care about, then your ‘opportunity’ might better be called a pyramid scheme so please close the door as you leave and don’t besmirch the good name of franchising.
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