How do you get the perfect franchisee ?
All businesses rely on quality staff who are engaged and motivated. Getting recruitment decisions right can make a massive difference to the bottom line. This is especially true for franchise businesses. Research by Zolfagharian and Naderi published last year focused on the specific HR challenges faced by franchise businesses, where the business structure can create “even more substantial challenges in devising and implementing their HR policies and practices.
The quality of HR Management is an essential indicator of the growth potential of a franchise firm; selecting the right staff can make or break a franchise network. As Zolfagharian and Naderi point out, “the challenge is for franchisors to ensure their prospective or current franchisees enjoy the right mix of entrepreneurship and risk-aversion.” Generally, people who chose to invest in a franchise over starting their own business have a lower threshold for taking risks and have had little or no experience managing a group of employees so as a result, they can fail to invest enough time and money to train their employees. The also lack more general management skills and behaviours.
Writing for Inside Franchise Business last year, James Young explained that “Unlike small business ownership which requires a bucket load of entrepreneurial thirst, the franchise industry needs people who can follow systems, work within a framework or manual process and excel in a team environment. They own and operate the business and need to be a leader while driving their own business performance but within the parameters of the franchise system.”
These are not the only findings in this area. The Asia-Pacific Centre for Franchising Excellence researched the major causes of franchisee / franchisor conflict. Two of the key issues related to franchisee recruitment, including the perennial short-term temptation to take on unsuitable franchisees to give the business a cash injection and the problems caused by a lack of franchisee due diligence which can lead to unrealistic expectations and increased levels of conflict.
Going back to Zolfagharian and Naderi they conclude that “the farther a prospective franchisee is from the ideal mix of autonomy and risk-aversion, the more likely the franchisee, the franchisor and to some extent other franchisees in the network will experience psychological and financial distress.”
All of this sounds a touch depressing. In my conversations with franchisors there is a clear pattern of business owners investing a lot of time and effort into trying to recruit the best possible franchisees and then training them to be the best they can be. Yet the evidence shows that despite our best efforts this problem persists. Is there a cost-effective way to screen potential franchisees for the optimum mix of skills, behavioural traits and work preferences?
Yes, there is.
Harrison Assessments do just this. We work with franchise businesses to identify the optimum skills, behaviour and preference mix found in their successful franchisees. We then apply this to all potential applicants, either as an early screener tool to help spot enquiries from people with real potential to make a success of running a franchise for you, or later in the process to really drill into understanding them and how to get the best from them as people.
There are plenty of psychometric tools out there, but I would question if any cut to the chase quite so effectively. Please contact me at julia@be-astute.co.uk to find out more about how you can significantly improve the speed and accuracy of your franchisee recruitment.
Sources:
https://www.emerald.com/insight/content/doi/10.1108/PR-04-2018-0139/full/html
https://www.franchisebusiness.com.au/cost-of-poor-franchise-recruitment/
Julia Stock June 2020