Pick Me!! Pick Me!!

Remember back to childhood and that tense moment on the playground wondering if you’d be chosen by the “cool” captain for the dodgeball team? Mentally you’d go through your qualifications: decent thrower, good dodger but only a so-so ball catcher. Would that be enough? Surprisingly, something similar occurs when buying a franchise: a franchise company is under no obligation to award a franchise to just anyone who can afford the franchise fee.  You have to be chosen.

While franchisee candidates do an in-depth study and perform due diligence before choosing a franchise company, the franchisor as the “captain” of the team is also checking out the candidates as potential teammates. Why are they so choosy? Because a franchisor has much at risk when a franchisee fails.

A failed franchisee is never a secret. A franchisor must report every failed franchise unit in a document called an FDD (Franchise Disclosure Document). This document is provided to each and every person interested in buying the franchise. A company that shows significant franchise unit failures will have a more difficult time attracting new franchisees. Failed stores are a red flag that something in the franchisor’s system is wrong and this can tarnish the brand.

Also, like any good business, a franchise company will want to populate their system with great people. Since franchising is based on a strong and consistent brand, a franchisor looks for franchisees who will present the brand in the most positive light. They only want franchisees that are able and willing to learn the system and work within its specific parameters. A franchisee who is incompetent or bends the rules gives the entire brand a bad image.

Therefore, when researching a franchise, don’t be surprised when you find that they will have as many questions about you as you do about the company. A franchisor is putting time, money and reputation on the line, so most have developed a “profile” of a successful franchisee which they use to determine if you are “right” for their business.

Knowing what franchisors look for will help you put your best foot forward. These are the most common items a franchisor looks for in a potential franchisee:

• Money may not buy happiness but you will need it to buy a franchise. Most franchisors have a minimum net worth and liquid capital requirement for their franchisees. While this may seem obvious, there are other demands on cash availability beyond the initial costs of the franchise – such as the length of time it will take your business to start making money and the living expenses you will have during that time. There are financing options available that may help you qualify if you are short of capital, however no good franchisor will want to see you start out your business heavily in debt.
• Personality is paramount to passing the “test.” Few businesses run themselves. They require hard work to get up and running. Here are some personality characteristic questions that seem to be commonly asked in all successful franchise systems:

o Are you willing to follow a system or are you the type who wants to do everything your own way?
o Do you enjoy working with people?
o Can you lead a team of employees?
o Are you focused and decisive?
o Do you enjoy solving problems?
o Can you set and meet personal goals?

These are some of the questions a franchisor may have for you and your answers will determine not only if you can qualify for a particular franchise but also if you will be a successful franchisee.

• If the shoe fits, you’re a match. “Fit” is another area franchisors look for. Each company has its own culture and franchisors realize that a franchisee must be comfortable with the corporate staff as well as the other franchisees – and vise-versa.
• Does experience matter? Franchising is one area of business where your specific experience is often less important than other factors. That’s because of the excellent training provided by the best franchise companies. In truth, some franchisors prefer franchisees without industry experience because it is easier to train someone in a franchisor’s system than it is to “un-train” a franchisee that has ideas that may conflict with the way a franchise system works. Again, it is the overall business experience you’ve attained through life that will make you a “star” in a franchisor’s eyes. One attribute that is required by most franchisors is that you have business acumen and understand how the parts of a business contribute to the whole.

The goal for every franchisor is successful franchisees. That’s how they make money – on the royalties they collect. As much as you may want to qualify for a franchise opportunity that interests you, remember that the franchisor has the background and experience to know what type of person makes a good franchisee in their system. To quote an old Rolling Stones song, “Oh you can’t always get what you want but if you try sometimes, you just might find you get what you need.”