There are numerous reasons why franchisee recruitment is so challenging, and we note the most relevant:
- Matching a viable opportunity or location to a suitable prospective candidate is by default a catch 22 situation. Franchisors are, rightfully so, seldom prepared to explore locations and commit to landlords if there is not a ‘provisionally funded’ franchisee waiting in the wings. The challenge is that franchisees may have difficulty in securing funding if the assumptions relating to the business case have not been reduced to numbers and the ‘right to occupy’ or an Offer To Rent has not been negotiated.
- Poor lead management systems and failure to incorporate a scientifically supported candidate profiling process. Surveys conducted amongst candidate franchisees originated and routed through the SA Franchise Warehouse (SAFW) platform reveals an alarmingly low level of satisfaction amongst prospects, as to the urgency and manner in which franchisors have engaged. Often insistent prospective franchisees are accommodated first, to the detriment of worthy candidate franchisees who are not prepared to ‘challenge the system’ implying that prospects who are not prepared to make a nuisance of themselves, simply don’t progress.
- Inadequate or no personal profile audit, entrepreneurial and aptitude assessments. This is a specialist skill and process, which funders (sometimes mistakenly) assume to be forming part of the franchisor’s recruitment process. Franchisors, at times rely on the funders to serve as their line of defence in the assessment of the ability of candidates.
- Applicants may not be fully committed to a particular brand and may be simultaneously engaging in negotiations with multiple brands without disclosing this to the franchisor(s).
- Declining a candidate franchisee application can be a very difficult decision for the franchisor, especially when the applicant’s balance sheet suggests that procuring funding will not be problematic.
Third party evaluations and recommendations provide a very useful independent view on key aspects relating to the suitability of a candidate franchisee.
- Franchisors often lack the experience to know the attributes of an applicant (credit record, candidate lifestyle, nature of collateral or source and availability of own cash contributions) and whether these may cause an application to be rejected by funders.
- Should a funding application be rejected, the time, energy, commitment and patience invested by all parties, but the landlord in particular, may create discomfort and potential reputational damage to the brand within the property fraternity which could negatively impact on the brand’s potential for securing prime locations in the future.
- Not knowing which advertising platforms to use, taken into account the number and quality of leads generated in relation to cost. Generally, the franchisor’s lead management system is an Excel spreadsheet that fails to incorporate any information as to the source or cost of the lead, or the reasons for non-conversion and as such does not serve to guide the franchisor in allocating future advertising spend. The internet is an extremely powerful lead generator but, because of the ease for prospective franchisees to enquire instantly on multiple brands, this unquestionably dilutes the intent of enquirers and resultant quality of leads.