By Eric Parker

A number of our clients are commenting that it has become difficult to find good franchisees in the difficult economy.

Let’s start off by considering the market for franchisees.  Like any market this market does change from time to time.

We find this Market to be :-

a)        Negative – Potential franchisees are afraid to commit investments/risk in the current uncertain political/economic environment.

b)       Role of the Banks –  It has become more difficult to raise capital as banks become more risk averse in a slowing economy.

c)        Franchisees are doing their homework much more diligently using websites such as Whichfranchise to research different franchises. If your franchise opportunity is not sound and competitive you will not secure good franchisees.

So what can you, as a franchisor, do to secure the well-qualified potential franchisees that are available?

1.        Make sure your franchise opportunity is financially sound and that, provided a franchisee works hard, he/she will draw a market related salary and get a 3 year payback.

2.        Ensure you are passing on all procurement benefits and not receiving rebates etc. at the expense of the franchisees.  Franchisees should be able to get better collective buying deals than if buying outside of the group.

3.        You must have a strong support structure in place to assist franchisees with advice on operational issues, marketing and maximising profits in their businesses.

4.        Your franchise package, including Operations Manuals, Franchise Agreement and Disclosure Document should be recently updated and complying to the Consumer Protection Act (CPA).

5.        It’s good if your existing franchisees are successful and happy – Potential franchisees should phone the current franchisees to get a reference – Franchising Plus can discuss a Franchisee Survey with you to gauge levels of franchisee satisfaction

6.        Are you listening to your franchisees and making the necessary changes that are required in the current economy? Consumers are looking for value while input prices are rising, leading to margin squeeze.  This will certainly lead to concern and dissatisfaction amongst existing franchisees (see previous point).

7.        You need to negotiate with the suppliers to secure the best deals and terms for your franchisees to ensure their competitiveness.

How to reach these good potential franchisees ?

1.        Is your advertisement saying the right things and projecting your brand in the correct manner?  Potential franchisees will also judge the quality of advertising for potential franchisees along with the accuracy and availability of information.

2.        Are you using the right media?

We have established the internet to be the best media as most franchisees now do their research online.

Example:, their website content is rich which gets picked up by Google, ranking in the top 3 unpaid search results when searching for franchise related keywords, this leads their high rate of unique and returning visitors to their website!

3.        How do you field the enquiries and how do you filter the enquiries?  Once you have a high potential franchisee, you need to move into a review and conversion mode.  You should review their information promptly and then set up the necessary psychometric assessments and initial interview to show them that you are considering their application seriously.  Remember, the franchisee is most likely considering other opportunities as well.

Franchising Plus is considering forming a group of reputable Franchisors to get together in a combined effort to educate and recruit qualified franchisees – e.g. we could organise an informative breakfast where we present viable opportunities to good potential franchisees.

We would really appreciate discussing this topic with you.

For other comments or to arrange an appointment, please contact us

Franchising Plus