10-year old Nuggets!
People often laugh when they first see my computer desktop, where every pixel is occupied by an icon. I have shortcuts to many of my most frequently used programs, files and documents. I also have folders on my desktop which are categorized into various subgroups of programs, files and documents.
Periodically, I must sort, organize, merge and purge my desktop and associated documents and programs, so I can make room to save more stuff to my desktop. Well this morning it was time to go through this organizational process. In doing so, I stumbled across a 10-year old document published by the University of Westminster, for the International Franchise Research Centre and sponsored by the Royal Bank of Scotland, titled: Aspects of Franchise Recruitment.
As I reviewed the document to determine do I ‘keep it’ or ‘trash it’ the document quickly began to address an often discussed topic here on Bluemaumau. Is a franchise a job, a business or an investment? Section 1.2 of the document discusses Types of Franchise Relationships, and makes a very interesting observation as to there being 3 subcategories under Format Franchising, based on initial investment, which are as follows:
- JOB FRANCHISE: where the franchisor is creating a well paid job for the self-employed.
- BUSINESS FRANCHISE: normally a larger investment involving business premises and employing additional staff e.g. McDonalds Restaurants.
- INVESTMENT FRANCHISE: relatively large investment where return on investment is the prime incentive e.g. Holiday Inn Hotels.
The above categories are something I think most of us intuitively understand, but personally I had been unable to reduce it to such a clear and concise statement.
Even though this document is now more than a decade old, and UK based, it contains many ‘nuggets of wisdom’ within its 47 Pages. Here’s a few:
- franchise companies have two main hurdles to overcome: "In the first place they are in the business of selling their product or service and secondly the business of expanding their network through promoting their franchise to prospective franchisees. It is only if they are successful at the first hurdle that they can move on to the second hurdle and then they are in a completely different market."
- for a business to be "franchiseable", there must be definable know-how and a distinct way of doing things, that distinguishes the business from others.
- "Many companies are prepared to spend a lot of time drawing up job advertisements and specifications but do not take the time and trouble to do similarly when promoting their franchise to a new franchisee. Many employment contracts have a six month probationary period whereas a franchisee is normally tied to a franchise under a five year contract before an option for review/renewal comes up. When the franchisee represents the franchisor's brand in a town and the only control is that of the system this is plainly not sensible."
- "Good franchisors are about recruiting people who will be successful – an indication of a bad franchisor is a willingness to accept franchisees they think will fail."
- "Too many franchisors lack the patience or the will to get it right. Financial pressures, lack of experience and lower standards will mean that they are not prepared to say 'no' to unsuitable candidates from day one. The right strategy is about making contact with the right person for your business. How you reach the right people with the appropriate message requires a great deal more thought than most companies put in."
- FRANCHISEE SUCCESS & FAILURE
- Factors for Success
- Eagerness to learn
- Willingness to work long hours
- People skills
- Sales ability
- Resistance to stress
- Ability to take direction
- Having money in reserve
- Willingness to take risks
- Factors for Failure
- Did not follow the system
- Did not work hard enough
- Went ahead despite family opposition
- Spent money on the good things of life before they had earned it
- Could not stomach selling demands or the job
- Did not have the self-discipline to cope with the loneliness of a small business.
- Under funded and misled the franchisor on the amount of funds available.
- "One of the major problems is that potential franchisees need to be honest with themselves. While this is easy to say, it is painfully difficult to do, especially when it means bursting the bubbles of your own dreams."
Click Here, if you’d like to read this [PDF] document yourself and to unearth many more nuggets of wisdom.
Believe & Succeed,DaleFranSynergy, Inc.Synergizing Franchising!