This article are provided for information purposes only, and are not intended as legal advice.

Who makes a good franchisee?

September 24th, 2009

You have decided that you want to buy a business but you need guidance so you decide that you would rather buy a franchise because you can get training and support from a larger organization.  Now that you have decided to buy a franchise, will you make a good franchisee?  Typically 10% of many franchise organizations are problem franchisees.  This is a statistic which I have received from many franchisors. 


Before you even decide on what type of franchise you want to purchase, determine if you would be a suitable person to own a franchise.  Go  talk to many franchisees around and find out what they like and do not like about their franchisor.  The experience of one franchisee may be similar to another.


Can you take orders and follow someone else’s system.  If no, do not even think about owning a franchise.  The master franchisor has hopefully developed a tried and true method of operating their business.  They have developed systems of growing the business, dealing with suppliers and customers.  They are now trying to roll out their concept into other locations.  They are going by past experience of all the other franchisees in their system. 


If you come around and want to reinvent the wheel, why did not buy a business system known as a franchise?  The master franchisor has tried and presumably learned what works and does not work and you think that you can tell them how to run their business?  They may have one or they may have hundreds or thousands of franchises, you are not going to know more than them?


Many franchisors do not want absentee owners.  They want more than just an investor although I have seen investors buy franchises and then hired all the people that the master franchisor indicated who would be the best possible people to run and operate their franchise.  If you have been an entrepreneur or run your own business or ran someone elses business with no or little guidance, you are more likely to be what I refer to as unemployable, which is the inability to report to someone else.  If you have been at the top of an organization, you will probably do poorly for taking orders and following recommendations of others including the master franchisor.


If you have been a follower and never had to supervise anyone, will you be a good franchisee?  That will depend on the individual, are you involved in other organizations and sports teams of your kids, are you a coach or assistant coach, have you ever co-ordinated events with other people and dealt with all the issues that you will encounter such as each parent complaining that their child does not play enough?  Can you deal with people and what some people perceive to be a major crisis but in fact can be easily handled?  If you are not a people person then dealing with people in a franchise will be difficult, you may not be the ideal candidate.


Now that I have mentioned who may not be a good candidate, who is left?

  • people who were managers in a business which were downsized and now want to be independent and own their own business
  • salespeople may be very entrenched on how to do business so they are not always the best candidate
  • people who have worked well with others, supervised them, can deal with both money and staffing
  • someone who can motivate others
  • someone who can follow rules and a system
  • a multi-tasker
  • someone who has a lot of support from their spouse and family because starting a new business can be very time consuming


Make sure you ask the question, will I be a good franchisee?  If you are talking to a master franchisor, find out what they believe are the characteristics of their best and worst franchisees and see where you think that you would fit between their best and worst in their system.

Filed under: buying a franchise — Gary Landa @ 1:12 pm

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