Characteristics of a Successful Franchisee
By F. Georges Sayegh
F. Georges Sayegh, A.S.D, C.ADM, FCMC of Quebec and Ontario, is a consultant in franchise and technology transfer and author of 18 books on franchising and associated businesses. To reach him: gsayegh@gsayegh.com; Tel.: (514) 216-8458.
Nowadays, being a franchisee is not a guarantee of absolute success as it will largely depend on the character traits of the franchisee himself. For this reason, franchisors will pick out the character traits of the right candidate they are looking for. Successful franchisees have some characteristics in common which we observe below:
1. Risk taking
Not everyone has a taste for risk. Some people take the risk of investing in the stock market, while others opt for gambling. These people can be bankers, professors, politicians, professionals, firefighters, police officers, tradesmen to name a few. Despite the fact that these people take risks, they do not necessarily have the profile of a businessman and certainly not that of the entrepreneur who wants to go into business and have his own business.
The ideal franchisee is one who wishes to be in business while being accompanied by a franchisor in order to benefit from his brand, his know-how, his sources of supply, the advertising strength of the network as well as to complement any weaknesses at the administrative, managerial, human resources, or commercial level, to name a few.
2. Not afraid to put in the hours
Owning a franchise does not mean that the employees will do all the work in the franchise business. Being a franchisee often requires replacing staff due to absences, delays, overwork, an increase in merchandise received, customers as well as other reasons. This means that the franchisee has to put in more effort than his staff. Not only does he have to see to the business operations, execute those operations, make the purchases, supervise stock management, manage personnel, carry out the operations, manage the administration, and meet with bankers to name a few, but he must also plan the staff work week, structure his own weekdays, keep track of tasks, keep his mental focus sharp, streamline his flow of work, avoid distractions, control inventory, supply, sales, wages, accounting, hiring and firing of staff, communicate with franchisors and bankers, manage stress, manage risks especially with the pandemic that has not let go, find inspiration to motivate himself, all this without forgetting to follow a healthy diet and above all set healthy limits between professional and private life.
3. Work under pressure
The ability to work under pressure involves coping with constraints that are often out of his control - they may be resource or time constraints, the difficulty of a task or insufficient knowledge required to accomplish a task, or new changes or unforeseen problems.
In franchising, the candidate or the prospective franchisee will have to analyze his character traits to know if he has the capacity to flourish while working under pressure, whether created by his relations with the lessor’s staff, suppliers, banker, franchisor, employee performance issues or other obstacles that will prevent him from performing his tasks while remaining focused on his operations.
As stress is inevitable, it is important for the candidate to analyze himself to determine if it is possible for him to learn to channel his stress while running his business in a healthy and productive way.
4. Desire to learn
Willingness to learn is a key behavior that helps anyone move forward in life, both personally and professionally. In other words, it is about being open to new experiences, changes, and having the skills and information that will improve one's abilities while having fun doing tasks.
Continuous learning is part of the success of a business. Good franchisees learn from others to understand the ins and outs of the business, as well as ways to improve. Good franchisees must be prepared to learn not only from the franchisor and other franchisees, but also from customers, in order to make their franchise a rewarding and profitable success. At this stage, the candidate does not have specific experience in the sector, as the franchisor will provide him with the training and support to help him make his franchise a success. This success will be conditional on the potential franchisee’s readiness to learn.
In franchising, there is not much room for ego - the candidate must be prepared to learn and grow while adjusting to the standards set by the franchisor. It is important to understand that he must accept the training and advice of the franchisor or his representatives. Every circumstance - positive or negative - should be viewed as a learning experience that can help him succeed and become more profitable.
5. Willingness to delegate
The future franchisee must know when to delegate. Just because he owns the business doesn't mean he has to do it all himself. A good franchisee should be aware when to delegate work as needed. Delegating work will help relieve some pressure and allow him to focus on other areas of his franchise that can help grow his business.
6. Adaptability and flexibility
“Adaptability is a willingness to confront or change one's own ideas and prejudices. Flexibility is more a willingness to ‘meet others halfway’ in a procedural way.” Being adaptable is key as a franchisee. It is essential to possess the ability to be flexible and adapt to changing circumstances, as well as to be resilient and able to bounce back from missteps when establishing a new business.
That said, any franchisor will be looking for flexible and adaptable candidates. For example, he may search for candidates who are geographically mobile or ready to operate their establishment elsewhere than where the candidate resides.
However, if the requirement to join that franchisor's system requires a certain flexibility or adaptation on the part of the candidate which does not necessarily correspond to the candidate's family situation, then he should abandon the acquisition of such a franchise.
Despite all the goodwill and ambition of the candidate, if he cannot adapt to the circumstances or the changes, then we should not continue the process and end up regretting his actions later. The candidate must be fairly logical with himself in analyzing his adaptability. If not, he could later be forced to sell his franchise under the circumstances and put through myriad problems in divesting his franchise and suffering the loss of his investment.
7. Leader / Communicator
Leadership and management experts agree that effective communication from leaders is critical to organizational success in the short and long term. In the franchise industry, communication and leadership present both challenges and enormous opportunities. Successful franchisees are generally leaders.
Franchisors are looking for a candidate who will be able to demonstrate leadership and influence with good decision making and, most importantly, excellent communication skills necessary to lead and motivate staff as well as ensure that the franchise provides top-notch customer service.
In the franchise industry, there is a great diversity of models in an increasing number of categories of companies. One factor that is certain is that the leaders of the franchise industry place great importance on good communication. Achieving growth and success depends on a leader's ability to clearly and consistently communicate their vision for the future to everyone in their organization, as well as remain open to feedback. To understand how effective communication leads to success in terms of unit growth, sales, talent recruitment and retention, and operational efficiency, it is important to understand that the best franchisees are those who accomplish this every day in their businesses.
8. Team player
From day one and throughout operations, the franchisee will work with the franchisor’s representatives and other franchisees in the group to achieve a common goal. The franchisee must understand his role and share the success and challenges of his team (the members of the network).
That said, franchisors look for great team players who do their job and do their fair share, working hard and delivering on their commitments to achieve a common goal - profitability for each operation. As a result, he will insist that the candidate demonstrate to him that he has solid skills under the circumstances.
9. Ask for help
Asking for help implies that a person is willing to ask for assistance or support. Not everyone is willing to ask for help for fear of criticism or reluctance to change their way of thinking. This element will be analyzed closely by the interviewer when meeting with the new candidate.
When an operator needs help, they should do it when they need it, not after the fact. When faced with obstacles, good franchisees seek help from the franchisor, staff or family. The willingness to ask for help is a key part of maintaining a successful and healthy partnerships for the franchisee's business.
10. Focused on results
Being driven by results is about a person's ability to build momentum based on their ultimate goal of getting things done. Getting to a finish line takes a lot of effort, concentration and hard work.
Although the franchisee receives help from the franchisor, his success as a franchisee will ultimately depend on him. Successful franchisees are motivated by setting and achieving measurable goals to reach to stay focused and on track to make the franchise successful.
11. Financial fitness
Operating a franchise requires financial knowledge, including how to determine gross margins by product line, calculate the cost of labor, and analyze various ratios to ensure the sound and profitable management of the business.
Financial stability must often be demonstrated during the acquisition of the franchise. Successful franchisees have a propensity for managing both personal and commercial finances.
The prospective franchisee does not need to know accounting, but he will have to demonstrate (during training courses) that he has the natural ability to learn how he will manage the finances of his operation.
12. Financial capacity
One of the criteria for accepting a new candidate as a future franchisee is based on the individual's financial situation. Does he have the funds to invest in his new business?
As a general rule, any good franchisee will need to demonstrate that they have the necessary funds to start their business. In other words, does he have the cash or savings to cover his family's living expenses until the franchise turns a profit? After signing the franchise agreement and setting up the franchise, a good franchisee will always be vigilant about income and expenses as the business grows. Good franchisees don't stretch beyond what they can afford.
In conclusion, franchising is not necessarily suitable for everyone. The first step is for the candidate or the potential franchisee to analyze his character traits to know if they correspond to the constraints of the network with which he will have to cooperate throughout its operation. Following that, he should analyze the state of his physical health. Finally, he should examine the support of his family members in operating the franchise in a healthy and profitable way, without forgetting the work criteria, minimum investment, search for a franchisor, meeting with the franchisor's staff, meetings with the franchisees of the group, and the evaluation grid. This analysis will allow him to assess whether or not it is possible for him to embark on this business process.