By Carl Reader QFP, d&t business advisory
Depending on the network, there will be varying levels of skill required to join a franchise. Some brands that I know of will only recruit franchisees that have experience within the sector.
This is particularly prevalent in the children’s tuition industry; and for example, a performing arts school might only take on a franchisee who has both experience and an interest in the arts.
Some other networks actively discourage those who have experience in doing the work of the franchise from joining, simply because they do not want to inherit skills which might be deemed as ‘bad habits’ when compared to the way that things should be done according to the franchisor’s operations manual.
Regardless of whether industry experience is desired, there are a number of transferrable skills which would be desirable in any franchise network, which can be broadly divided between sales skills and management skills.
Sales skills: Whatever the type of network, every successful franchisee is a successful sales person in some shape of form. Some franchisees believe that upon signing the franchise agreement, the phone will magically start ringing and customers will be willingly signing cheques payable to them. The reality is that this isn’t the case, and there is a lot of input and effort required to build a franchise, in the same way that an independent business needs a level of ‘sweat equity’ put into it.
A typical franchise will have a good proportion of the operations of the business systemised, but there is always an element which requires sales skills – whether that be direct selling to customers, or simply selling the concept and vision of what you are doing to your staff.
Management skills: Any franchise will require a level of management skill, whether the franchise is a single operator ‘man in a van’, or a multi-unit retail franchise. A franchisee will be expected to manage their business affairs, use a CRM (customer relationship management) tool, deal with staff and customers appropriately, and ultimately make good use of their time and money.
Fortunately, many potential franchisees will have been exposed to some of these areas during their previous employment (bearing in mind that according to the BFA/NatWest Survey, 74 per cent of franchisees come directly from employment).
Having said that, it is very rare that a previously employed franchisee has had complete exposure and responsibility for all of these areas, and it would be a wise move for any prospective franchisee to perform a self-appraisal on these skills to ensure that they are choosing the right franchisor who can support them through the areas in which they might not have had as much experience.
There are also aptitudes that would be desirable in most franchisees, and not all of them fit in with the popularised view of entrepreneurship, particularly the ‘wheeler dealer’ characters on business TV shows and popular sitcoms. Most franchisors do not simply select their franchisees based on a CV and a list of skills; instead they recruit based on who the person is, and whether they would be a good fit for the network. These include:
Honesty: The franchisor is going into a partnership with you, which involves significant levels of trust and confidence from both sides.
The recruitment process is also not a cheap process, and thus they are making a significant investment in time, money and effort with any new franchisee. Therefore, it is likely that their view will be impacted if there are any signs of dishonesty, as in my opinion; dishonesty within a franchise (on either side, franchisor or franchisee) is the biggest root cause of disputes in franchise agreements.
Compliance: Following on from honesty, franchisors would also be looking to make sure that you would be compliant with their system, and indeed an advocate of it.
Although networks encourage ideas and innovation, for brand protection it is essential that the correct process is taken for these so that other franchisees are not affected by the brand being tainted should an idea not be right for the business. Franchisors want franchisees who are happy to follow the proven business model, not those who wish to create their own new business model.
Risk aversion: Although the typical perception of a business owner is that of a calculated risk taker, franchisors often would ask that their franchisees do not take risks with their business model.
Again, this comes back to compliance, as franchisees are provided with a blueprint of how the business has been successful in the past. Strategic changes to the business should be undertaken by the franchisor, who has an ethical obligation and responsibility to engage with the network and get their buy into the future direction of the network.
People skills: Not only are franchisees expected to stick to the system, but they are also expected to deal with staff and customers.
Regardless of whether the business is consumer facing or business-to-business, all interactions with external parties are in fact interactions with other people, and as such a basic level of people skills are absolutely vital when it comes to dealing with anyone either inside or outside of the franchise.