What Are Franchisors Looking for in a Franchisee?

What are franchisors looking for in franchisees?

Franchise organizations are businesses, too. There are specific management and growth aspects to successful franchise business operations that are unique (and additional) to those faced by other types of businesses. At the same time, like most businesses anywhere, franchisors must evolve with ever-changing customer, market, and regulatory circumstances, as well as the related evolving needs of the franchise system.

A franchisor’s aptitude with the specialized skills of managing and evolving a franchise organization will have a material impact on the resulting system into which you are buying. This is the true context for any franchise business.

The franchisor and how they run the franchise system is YOUR CONTEXT for how you will run yours.

We cannot stress this enough.

Because of this, much of our FD&D guide is focused on helping you gain insight into how the franchisor operates, along with whether or not their approach matches your needs and expectations.

Franchisors Approach Attracting Franchisees in a Variety of Ways.

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Franchisors most often approach attracting and on-boarding new franchisees in ways mirroring how they operate the business itself. There is a vast range of franchise business operating styles, just as there are a large variety of ways franchisors look at their prospective franchisees. Some take a “bring ‘em in if they can fog a mirror and the check will clear” route.

Many franchisors, on the other hand, have stringent requirements for potential franchisees even to speak with them or one of their sales representatives. The rest will vary broadly. In many instances, it’s because the needs of the operation require the franchisee to have a certain level of capitalization and business expertise. Take, for example, a hotel on one end of the franchise spectrum (yes, many of the brand-name hotels you know are franchises). On the other end, look at selling retail products part-time from a mall kiosk. It is clear the level of investment and the sophistication of the franchisee are correlated to the needs of successfully operating the franchise.

Understanding your franchisor and building the right kind of relationship with them is a major part of the success and enjoyment you will get from operating your franchise business. The bottom line is it’s critical to get to know your franchisor as well as you can. This relationship will tell you quite a lot about your chances for success with a franchise concept.

Have a concept evaluated using our Franchise Evaluator method. First concept evaluation FREE! Schedule one here.

Franchise Concept Evaluation

See if you qualify for financing from the SBA for approved franchises.*

*No impact to your credit score. For informational purposes only.