Understanding the makeup of a franchisee is critical to your success as a franchisor. The first most important thing you must know about franchisees is that they are not like you; they are usually not true entrepreneurs. In fact, in general, true entrepreneurs do not make good franchisees because entrepreneurs are pathfinders and not good followers. Individuals chose to become franchisees to:
- Reduce risk by investing in tested processes and models.
- Have a clear path of action and direction provided to them.
- Belong to an organization.
- Be in business for themselves but not by themselves.
So what’s in their make up? Franchisees are people who:
- Are normally risk averse,
- Need and want direction,
- Desire to belong to a team,
- Wish to own a proven business, and
- Seek to have more control over their destinies.
Does this sound like you? If you are a franchisor, probably not (except for the last point).
People who are considering franchising are searching for an organization to which they can belong; an organization that matches their own value system and that has an opportunity that matches their objectives. Although manifested and expressed differently, their needs normally fall in three categories: need for recognition, need for belonging to a family or team, and need for control of their work environment and decisions about their lives and businesses.
Individuals seeking to become franchisees are generally former middle or senior level employees used to a structured work environment, interpersonal interactions and recognition for their efforts. They are people in transition and as such they are subject to great internal upheaval. In many cases they are the middle-aged people who have been laid off, retrenched or down sized and their egos have been bruised. Fear of failure is a strong emotion in new franchisees.
People who choose franchising are looking for a lifestyle change. Lifestyle quality is measured in terms of: income and what it can buy, control and flexibility over one’s own time and the activities devoted to personal versus business as well as the sense of being your own boss. Franchise companies can foster a greater lifestyle quality by:
- Setting structures that allow franchisees to clearly define and achieve their personal goals without impeding the reach of company goals.
- Matching personal goals with territory size.
- Providing guidelines, direction and leadership within an environment of trust, support and flexibility.
Understanding the makeup of a franchisee is crucial to your success as a franchisor. Don’t make the mistake that many make seeking people like them. Franchisees should never be like you, the franchisor; to be successful franchisees they must be different.
Lizette, your observation about franchisees being people in transition and subject to internal upheaval is really valuable – and often a forgotten point. Franchisor staff are sometimes puzzled when a new franchisees struggles, especially if they were previously in a management position. What, they ask, happened to the prospect who ‘had it all together’?
To help franchisees succeed, it certainly helps to appreciate that fear of failure can result in people stalling, appearing unconfident and perhaps not following all the systems perfectly. This does not mean you’ve made a poor selection of franchisee, it simply means they are human. As a franchisor team member your job includes helping people find their own way through this stage so they can succeed.
This is one reason why it’s so important to focus on and review progress against the franchisee’s own goals – it helps see that progress is being made, encourages people to keep going, plus it gives something to celebrate.
Great post, lots of thought provoking material here. Thanks!
Kate Groom
Another great post!
Here’s my two cents, which is actually an excerpt from my article, “Startup or Franchise: The Choice is Yours”…
The typical franchisee must be willing to follow and adhere to a franchise company’s business system and ultimately, promote the same within their new franchise community at all times. It must be completely understood the system cannot be changed by the franchisee nor can their business be operated differently than the franchise company requires as the system is proven and uniform across the chain. It’s this uniformity throughout the organization that is paramount to brand awareness leading to company and franchisee success and is the foundation of an interdependent relationship between both parties to the franchise agreement.
A franchise is almost definitely not the right choice for the business maverick or renegade. Certainly, there is an important place in business and in our hearts for these unique innovators. If not, we wouldn’t know Apple or Dell Computers as they’re known today. Even McDonalds, as probably the greatest franchise of all time that stormed through the country under the leadership and direction of a true maverick, Ray Kroc, would not have been successful without franchisees being required to strictly follow and adhere to the McDonalds system without fail. No questions asked and no room for negotiation.
Great additions and comment as always… thanks Paul.