What Do Franchise Brands Look For in Franchisees?

At FranNet, our mission is to expertly match prospective franchisees with the franchises that best suit their ambitions and capabilities. While it’s important for potential franchisees to evaluate their franchise options carefully, it’s also helpful to understand what franchise brands look for in a franchisee. 

Of course, franchisors want to see that potential franchisees can afford the franchisee fees, are fully vetted, and have a good credit history. However, beyond these core requirements, there are specific attributes that franchisors want to see in their franchisees. 

5 Essential Qualities & Characteristics 

#1 – Financial stability and investment capability

It goes without saying that potential franchisees need to be able to afford the initial franchise fee and required start-up costs. However, franchisors also want their franchisees to have sufficient capital to sustain the business during its early stages. This includes covering marketing and operating expenses until the business becomes profitable, which can take up to several years in some cases. If franchisees are financially stable, then it’s less likely they’ll face cash flow issues and loan defaults, which would ultimately risk the success of the franchise.

#2 – Alignment with brand values and culture

Franchisees essentially act as ambassadors of a brand, which means it’s important they align with the brand’s values, vision, and culture. Beyond this, franchisors want their franchisees to be committed to upholding its standards of quality, customer services, and ethics. Brand consistency across all locations is a key aspect of franchising, so franchisors will seek franchisees that are committed to fostering a cohesive brand identity.

#3 – Business acumen and management skills

While franchisors will provide training and support to develop these skills, it’s essential that potential franchisees already have a solid foundation. Franchisors will look for franchisees to understand basic principles such as financial management, marketing, sales, operations, and human resources. Franchisees should also have leadership qualities in order to effectively manage employees, handle day-to-day challenges, and make strategic business decisions

#4 – Commitmentment to following the franchise system 

In addition to representing the brand’s values, franchisees need to be committed to following the franchise system. After all, a proven business model and system is one of the unique advantages of franchising. Following the franchise’s established system to ensure the brand’s consistency includes:

• Adhering to the franchise’s standards, procedures, and guidelines 
  • Using approved supplies
  • Implementing prescribed operational protocols 
• Participating in ongoing training and support programs 

#5 – Demonstrating compatibility with the franchise brand

If a franchisee isn’t compatible with the franchisor, then they will likely have a contentious relationship, which isn’t good for either party. A few steps to take in order to ensure compatibility include: 

• Research the brand thoroughly – This will help you determine if you can align with the brand’s values and commit to follow its systems. If you’ve researched a franchise brand and are willing to represent it on its own terms, that’s a good marker of compatibility.
  
• Prepare a solid business plan – Having a well-thought-out business plan is a good indicator to the franchisor that the prospective franchisee is serious about the partnership and is committed to the franchise’s success.
  
• Highlight relevant experience and skills – For example, if you are a retiree with a former career, it makes sense to purchase a franchise brand that would utilize that experience. Having relevant experience and skills further demonstrates a franchisee’s compatibility with a brand. (Further reading: Starting a Business After Retirement: Do’s and Don’ts)
  
• Communicate effectively with the franchisor – Former U.S. president, Gerald Ford, hit the nail on the head when he said, “Nothing in life is more important than the ability to communicate effectively.” The ability to communicate effectively is key to establishing a compatible relationship between franchisee and franchisor.