22 March 2013
Category:
Franchising
Comments: Comments Off on The Fine Art Of Saying “No” To The Wrong Franchisee Profile

The Fine Art Of Saying “No” To The Wrong Franchisee Profile

Olympia Fields, IL – Some franchise consultants lose sleep over the unpredictable economy.  Others worry about the credibility of their market data on a given project, or the viability of a given prospect’s concept.  What keeps me up at night is my phone ringing with one of my franchisor-clients on the other end of it, asking me to agree with them on a completely inappropriate franchisee buyer for their next unit.

Most of us in the human race hate the very idea that we can be accurately “profiled” in the first place.  This in itself adds to the complexity of the decision when a willing buyer waves a check in front of a young franchising company, even though they lack the proper work history, emotional strength, functional capability, and overall dedication to the concept to be an asset to the franchise system.  There are many times in life where we are forced to make uncomfortable compromises to move forward.  The due-diligence process leading to a new franchisee is not one of them.

Intellectually most of us know that inviting the wrong franchise buyer to the party is insanity.  It is much more critical to award the absolute best franchisees than it is even to hire the correct manager for a corporate unit, because even though both are critical to a business, it is much harder to cure a failed franchise operator than it is to fire a bad manager.  In spite of the seemingly endless classes I teach on this topic during the various training cycles of a new franchisor, including borderline “brainwashing” sessions, standing on my head at various junctures, and one-on-one sessions with a dozen case-studies on the topic for illustration purposes, when financial pressure rears its ugly head the new franchisor is eternally tempted to think the best of a bad prospect.  At the end of the day, the franchise business belongs to the franchisor and it is they who suffer the consequences of caving in to this temptation.

Part of every well rounded strategic analyses and marketing plan for a new franchisor should include a thorough “bullet list” containing all of the fundamental elements and qualities of a desirable franchisee for the enterprise.  This is an obvious and clear focus of most gifted franchise consultants.  However, what is lacking in most competitive documentation that I have seen is an actual built in routine that is mandatory prior to any and all closings taking place on a new award.  Much care is taken by the responsible franchisor in making certain that all legal compliances are followed prior to making a sale most of the time.  However, franchisors do not generally have an adequately defined and implemented mandatory routine forcing the proper vetting of prospects prior to sale.  Oh, they pull the usual credit and legal reports and other basic background checks.  What about the overall psychological profile, and vetting and testing of overall abilities?  Are they physically healthy enough to work sixty hours a week in your environment?  Every required routine must be clearly defined and fully used.  The temptation to be blinded by the desire to close a franchise sale is very dangerous.

One of the best examples of this can be taken from the tax services industry, of which I have spent a large percentage of my life prior to becoming a franchise consultant.  Because of my prior position, I have been approached by three very experienced players looking to compete with H&R Block, Liberty Tax Service, and other franchises or corporate chains to take advantage of fragmentation in this market.  One of my new prospects from this industry was an area developer for one of the major tax franchises.   He spoke to me very emotionally about never wanting to be like the company he worked for, which would sell a tax franchise to literally anybody whose check would clear, leaving him to deal with the explosion that ensued when their inappropriate participant failed miserably.  Even well known names in the industry rush the process, and are some of the worst offenders.  The tax industry is only one example of how the art of saying “no” needs to be learned.  Every franchisor, new or old, needs to have a defined and mandatory system in place that results in a full and proper vetting, using both internal and external resources in a reliable and consistent way.

Learn the art of saying “no” and exercise some patience and wisdom in the sales process.  Remember, the individual and multi-unit buyers of your franchise are joining your family for the long term.  Don’t “sell” your franchises in a desperate frenzy when the pressure is on.  Instead, “award” your franchises to the best prospective applicants.

Interested in learning more about franchising and/or how to franchise your business?  Visit http://www.francorp.com to download the free e-book and take the franchise quiz today!  For more immediate assistance call 800-FRANCHISE (800-372-6244) to speak directly with a franchise analyst to learn more about taking your business the next level and beyond.

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