Franchisee recruitment is an issue in Australia and globally. A recent Canadian1 study polled 400 franchisees to uncover the motivations surrounding a decision to invest in a franchise. The results provide some insight into the strategies franchisors may use to maximise the value of their franchise, as well as its attractiveness to potential franchisees.

Shopping around

The results of the survey show that franchisees are generally not 'shopping around' for a franchise. Rather, close to half only considered one franchise opportunity. The initial appeal of a franchise therefore carries a lot of weight. In this regard, franchisees look at:

  • Available franchising opportunities
  • Known franchise name
  • Well known brand
  • Unique concept with low competition
  • Speaking to other franchisees
  • Company material

Young franchisees

The survey reveals that the majority of franchisees are aged 35 to 44 years old. In addition, 56% of those surveyed expect to own the franchise for at least five years, although a significant proportion see it as a final step before retirement. So it is serious long-term decision, and it involves a commitment of a lot of money.

Franchisors seeking to appeal to franchisors should focus upon the durability of their business model, and emphasise fair renewal policies, open communication with franchisees and ongoing support. The survey indicates that potential franchisees are looking for a business which will grow with them and provide the continuous training needed to build their franchise.

Appealing to the entrepreneur within

Approximately half of franchisees indicated they had considered opening their own business, so franchisors need to focus on the relative strengths of their franchise over an independent business. This includes highlighting the lower risk of the franchise compared to starting a business, as well as the ease of running a franchise. Potential franchisees also factored into their consideration the training and support available when choosing a franchise. Of course, low fees and profitability potential were influential in the decision making process.

The 'entrepreneurial' franchisees were seen to go through a more exhaustive process in choosing a franchise. Speaking to current franchisees was the main source of information for evaluating a franchise. Maintaining morale and giving current franchisees good reason to remain loyal is therefore one of the most credible selling points of your franchise.

The survey confirmed that business development forms an important part of franchising, with franchisees seeking a strong brand presence.

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