Creating the Ideal Franchisee Profile requires the franchisor to reflect about the company values, the beliefs it holds, its culture, and the traits and skills required of franchisees for the success of the business. It also calls for franchisors to be flexible and recognize that the profile will most likely need fine-tuning and modifications as the franchise organization changes and grows.

For example, new franchisors that don’t have an established and recognizable brand need and tend to attract more risk-taking franchise candidates when they first start to franchise. As the franchise system grows with increasing numbers of franchisees, the risk tends to decrease as the brand becomes stronger and the franchisor hopefully gets more financially stable.

An increasing number of franchisees usually leads to a higher name recognition making it easier for franchisees to market their business and get customers. Further, as the franchise company grows it will most likely develop stronger support systems that can result in higher success levels for some franchisees. Both of these factors lead to lowering the risk associated with the franchise opportunity. Therefore, it is appropriate to think that most franchisors will need to modify their Ideal Franchisee Profile at the point when these factors are achieved. Risk tolerant candidates will probably not make the most suitable franchisees under the new conditions and individuals with different characteristics may become better franchisee candidates.

15 Questions to contemplate and answer to create the Ideal Franchisee Profile include:

1. What is the company’s mission and how must it align with ideal franchisees?
2. What are the values ideal franchisees should have?
3. What kind of prior experience should they have?
4. What kind and level of education should they have?
5. Where do they want to open their franchises?
6. What reasons should they have to invest in the franchise? And, what reasons would make them undesirable candidates?
7. Would they want to be owner operators or investors who want to operate the franchise with an appointed manager?
8. Would they want to own one location, multiple locations, or either?
9. What type of management style should they have?
10. What is their ideal communication style?
11. What is their preferred work environment?
12. How resilient should they be?
13. What should be their preferred tasks?
14. What should be their abilities and skills?
15. What are the economic resources that they must have: net worth, liquid assets, and total investment parameters?

Make sure to write down your answers to these questions and use this criteria in evaluating each franchise candidate.

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•  They seek independence BUT with minimal risk.

An entrepreneur is prepared to put everything they own at risk just so they can own a successful business. The risk of failure is an accepted part of an entrepreneur’s life. It is quite common for entrepreneurs to become viral entrepreneurs and start at more than three different businesses in their career. 

True franchisees are not true entrepreneurs. Most franchisees want the freedom to make decisions and be their own boss, but they fear total financial risk. Franchising is a natural alternative to the high risk of being a true entrepreneur. Franchisees get the opportunity to have more independence than if they were employed yet they benefit from the experience, the support and the training of the franchisor.

•  They want continuing R&D support.

There is a common understanding in the world of franchising that the responsibility of franchisees is to properly handle customers today while the responsibility of the franchise company is to ensure there will be a tomorrow. Small business owners such as franchisees do not have time to focus on innovation or to keep abreast of changing buying habits of their customers. Franchisees expect and are dependent upon the franchise company protecting their future success.

•  They seek the benefits of combined purchasing power.

Logic suggests that group purchasing will result in lower costs for everyone. Prospective franchisees hope to benefit from the franchise company’s efforts to reduce their operating expenses through their buying power. They realize that they do not have the same connections or ability to negotiate favorable pricing as compared to larger companies. 

•  They don’t want to make mistakes.

Prospective franchisees are afraid of making mistakes. They place great value on the knowledge and expertise of the franchisor. They feel this experience will protect them from making mistakes.

In addition, people looking to invest in a business see franchising favorably because it’s a widely accepted choice. Franchise companies are regulated by the Federal Trade Commission (FTC) that requires them to have a Franchise Disclosure Document (FDD) that creates transparency of the franchise opportunity being offered.  

 Prospective franchisees are not “true” entrepreneurs and in most cases the money they are investing is everything they have and what they can borrow. In their minds, there is very little or no room for making bad choices. Franchising reduces the chances of making the wrong decision. 

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