Australian Franchises

Philip Ciniglio on "Franchise Recruitment Philosophy"

Philip Ciniglio on "Franchise Recruitment Philosophy"

“Selling franchised businesses is a contradiction in terms and that is why you should not be selling franchises you should be recruiting franchisees. It is better to create an environment where the prospective franchisee can make an informed decision.”


There is much behind this philosophy, let me explain.
The contradiction is about the fact that franchise systems in their early growth phase usually depend upon the Initial fees collected from the sale of the franchised businesses. The danger of this situation is not being discerning about choosing the right franchisees. If you do not stick to a rigorous recruitment process then you take the risk of recruiting franchisees that are not right for your concept. That of course will lead to problems down the track and possibly even litigation.

But also, if the applicant appears to have all of the attributes desired to run a franchise successfully then it can be easy to fall into the trap of over selling, only because you may think that you have found the right person and you want to grow your system as quickly as possible. This would be a major mistake not just because you may be compromising your ethics but also from the point of view that a purchaser will become suspicious if you are too keen, especially with the size of investment that is required for some franchise concepts.

Another issue that can be far more damaging than putting a potential purchaser off, is the long term effect of managing and working with the franchisee.

Managing franchisees is far more difficult than managing staff.  Franchisees are in essence business partners and quite rightly demand respect. They have put their cash on the line and are going to expect results. It is important to manage the franchisees expectations from the very start of the relationship.
If you have been perceived to have encouraged them into buying the franchise then down the track should their business struggle or not perform to their expectations (as many businesses do from time to time) then they will blame the franchisor and they could become a major issue to the system.

However, if it is explained to the franchisee from the beginning about their workload, their obligations and that despite purchasing a franchised business it is still their responsibility to make it successful, then they will understand why they will need to convince you that they are the right people and that they will take full responsibility for the success of the business.

In this situation there is a whole different level of respect between the franchisor and franchisee. If things become tough in the franchisee’s business or they are going through a slow time they are more likely to ask for assistance in how to improve the situation rather than attack the franchisor.
It should be noted that the objective of growing a franchise network is to grow the business as quickly as is safely possible. This is because your responsibility, as a franchisor, is create value for both the franchise company and the franchisees by growing your distribution network and creating brand awareness, however you must follow the process of best practise in recruitment to ensure that each franchisee, not only has the business acumen, but also has the personality profile that fits in with your franchisee criteria and even more importantly, the culture of our company.

There are many recruitment software packages available that will assist you in determining suitable applicants for your franchise system.

Your culture; It is important to include in your organisational culture the language that everyone uses regarding recruitment. For instance, if a National Office team member speaks to others about “how many franchises have you sold this month” not only is this creating the wrong attitude amongst your people but if franchisees hear that language they may form the opinion that all the company is interested in is hard selling franchises.

So you should instil into your culture, when referring to franchise recruitment, that you use exactly that in your internal language “recruitment” not “selling”. This is a good practise for your people and sends out a message of respect.

In summary, franchisees are your business partners their success is your success and mutual respect should be a cultural mandate throughout your company.

Philip Ciniglio
Managing Director
Market Minds

Author: Philip Ciniglio from Market Minds

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