Over the years, franchising has become the go-to solution for entrepreneurs looking to start and run their own businesses.
According to Vetted Biz, in 2020, there were approximately 753,700 franchise establishments in the United States, producing about $670 billion U.S. dollars and employing 7.5 million people. In 2021, the industry produced nearly $780 billion worth in value, according to the same report. With franchising providing financial possibilities that could change the owner’s life, it is no surprise that many aspiring entrepreneurs turn to the franchise industry.
With that said, not every entrepreneur is going to be the right fit for your franchise. Simply owning the right amount of financial capital doesn’t guarantee success for both the franchisee and corporate headquarters. There are multiple factors that determine the success rate of a franchise. With the relationship between the franchisor and franchisee resembling that of a marriage, both entities have to be on the same page for the relationship to flourish and be successful.
Just like in a marriage, finding the right partner is the key to success. Here are some key points to help you discover and sign the right entrepreneurs for your franchise.
The Ideal Characteristics
When looking for the right franchisee, there are two questions I often ask myself: are they going to be successful and are they a cultural fit? As it pertains to being successful, franchisors should look for translatable skills. Is the franchisee willing to focus on the needs of the client? Do they work hard? Can they follow a plan? These are all good questions to think about when approached by an entrepreneur looking to join your franchise. But one of the biggest characteristics I personally look for is are they outgoing. Part of building a franchise is creating the necessary partnerships that will help your business thrive and grow. Individuals who are more extroverted tend to have more of a desire to get out in the public and network. This makes it easier to develop connections within the community to build your customer base.
Regarding culture fit, it’s important to look for a franchisee that shares your company’s values. Whether that’s focusing on the client, helping others, or just being friendly, having those shared values makes it easier to develop a successful partnership. For example, at Gotcha Covered, if someone comes to us with a strong desire to meet the clients’ needs, then we don’t have to teach them that. We don’t have to motivate them to be client-first business owners because they naturally have that trait. They already follow a value that is extremely important to Gotcha Covered.
On an opposite note, there are many misconceptions about presumed character traits required to be a successful franchisee. While in some cases the entrepreneur may need to be an expert in the services offered by a franchise, that’s not the case in the majority. You don’t have to be a master chef to own a McDonald’s or Taco Bell. That’s one of the main misconceptions when it comes to owning a Gotcha Covered. May entrepreneurs believe you have to be a design expert, and that’s not the case. You can be a design dummy or have no experience in window treatments at all and be very successful. It’s all about having the desire, drive, will and work acumen to be successful. Those characteristics are vital for a franchise owner in any industry.
The Red Flags
While cultural fit and translatable skills are two of the biggest factors when choosing the perfect franchisee, there are a couple of red flags to keep an eye out for. While having the drive and a strong work ethic is crucial to selecting the right franchisee, proper funding is also important. As a franchisor, you wouldn’t want to put someone behind the 8-ball right out of the gate. If an entrepreneur doesn’t have the proper funding, it could limit and minimize their ability to grow the business.
A potential franchisee being extremely introverted could also be a red flag. As previously mentioned, to grow your business, it’s important to get out in the community and build relationships. Many businesses are not built to be successful by sitting in a home office. You have to mingle with the people in your community to build a reputation. Of course, that’s not to say you can’t be a successful franchise owner as an introvert. There are plenty of successful business owners who are introverted. There may just need to be a shift in your approach to building relationships. It could be as simple as focusing on one-on-one relationships as opposed to partaking in a networking event. Either way, you do have to get out and form those bonds that can make your business thrive.
A Perfect Marriage
For the franchisee-franchisor relationship to be successful, both entities will need to be in sync. While franchisors are vetting entrepreneurs, potential franchisees are also looking for ways the relationship can benefit them. They are looking for a partnership that both increases their personal wealth while also creating a lifestyle that is ideal for them. While it’s important for you to select the right franchisee, it is just as important for the entrepreneur to select the perfect franchisor. If both needs are met, it can create a seamless transition that is fruitful for both sides.
Paul Linenberg is the president of Gotcha Covered, a custom window treatment franchise that has over 155 franchises in the United States and Canada combined. The company specializes in providing end-to-end consultation to its clients. For more information, please visit gotchacovered.com. For more information regarding Gotcha Covered franchising opportunities, please visit gotchacoveredfranchising.com.