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How to Select the Best Franchise Candidates

Far too often the responsibility for matching the right franchise prospect to the most appropriate franchise falls upon the prospect. Franchisors have a significant responsibility to take those steps necessary to ensure that they grant franchises to those with the highest probability for success.

A key ingredient for a successful franchise system is qualified and competent franchisees.   Quality franchisees promote the franchise brand; add vitality to the network and increase franchise revenues and market penetration. However, it’s easier said than done.

A great deal has been said about the various ways to attract franchise prospects, including; what advertising work best and how to sell more franchises. Not enough has been said about how to qualify, evaluate and select the right people to fit a specific franchise. Here are some tips to follow for selecting new franchisees that are both qualified and competent to successfully operate your franchise:

  • Identify qualifications and attributes for new franchisees and adhere to these standards. Compromise only in those cases where there is very low risk of failure.
  • Conduct credit and background checks on all prospective franchisees before the process is completed. Investigate any red flags. Consider using testing to better qualify franchise prospects.
  • Request a business or marketing plan from franchise candidates. This will help to gauge their level of business knowledge and provides the franchisor staff a plan. The plan can be reviewed and add insight into the ability and expectations of the candidate.
  • Utilize diverse members of franchisor staff to interview and offer feedback on candidates. This will allow for more objective feedback from various individuals who represent the franchisor.
  • Provide field staff an opportunity to meet with or interview franchise candidates. These people deal with franchisees on a regular basis and should know the right questions to ask.
  • Don't compromise your standards and qualifications in haste to sell a franchise. Have "criteria for success" or a franchisee profile based upon the traits of existing successful franchisees.
  • Consider utilizing certain franchisees for screening and/or providing feedback on franchise candidates. Existing franchisees have a stake in the success of new franchisees. Be wary of utilizing franchisees who might feel threatened in their territory by the new franchisee.

By following these tips franchisors can minimize the risk of granting a franchise to the wrong candidate and instead increase the success rate for new franchisees.

About the Author: Ed Teixeira has over 35 years of franchise industry experience as a franchise executive and franchisee. He has served as a franchise executive in the c-store, manufacturing and home healthcare industries and has licensed franchises in Asia, Europe and South America. Ed operates FranchiseKnowHow  which provides information and advice to prospective and existing franchisees and franchisors. He publishes newsletters for the franchise community.

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About Ed Teixeira

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Public Profile

Ed Teixeira is the founder and owner of FranchiseKnowHow, which publishes articles and provides advice for prospective and existing franchisees and franchisors. He is also COO of Ed's most recent book is The Franchise Buyers Manual, a comprehensive guide for prospective franchisees. He has also published the Home Care Franchise Industry Update for the past 3 years. Ed has worked in the franchise industry for over thirty five years. He was a franchisee and has served as a corporate executive for firms in the retail, manufacturing, healthcare and technology industries. Over the course of his career Ed has been involved with over 1,000 franchise locations and has transacted international licensing in Europe, Asia and South America. His articles and interviews have appeared in numerous publications and media. Ed has spoken before various groups including: the International Franchise Association, the International Franchise Expo, European Healthcare Conference in Luxumbourg and the Chinese Franchise Association in Shanghai, China. He has participated in the CEO Magazine Roundtable Meetings with business leaders from around the country. 

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Franchise Consultant