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Choose Potential Franchisees Cautiously

Written on July 14th, 2008 by Joseph in Franchising Developments.

When you are starting a franchise as a franchisor, your success will squarely depend on your choice of franchisees. If you don’t use caution in awarding your franchise business for sale offers, you will end up offering them to the unworthy candidates. Remember, a single franchisee can affect the whole franchise system, thus making people distrust your brand name, which has probably taken years to develop. Also, each failure will have to be reported in the FDD, so it will always cast a shadow of doubt in the mind of the people who wish to buy a franchise from you. So, in order to avoid that, here are some tips on how you can evaluate the strength of a franchisee:

• First of all, look at their experience. It’s not necessary that they have experience in your field of work (unless it is a very technical work), but they are required to have general business skills. You can pick a person who have the skills and expertise you require. For example, if you are a franchise from the employment sector, you can look for people who have previously worked in the HR field.
• Then look at the personalities of the people. Are they too much of independent spirits? Then they may not make good franchisees. A franchisee should be ready to learn the ways of the franchisor even if he/she has previous experience in the line. But that doesn’t mean that he or she should just follow the rules of the franchisor; he or she must possess the ability to adapt the business format to the local conditions effectively.
• Examine the financial capability of the candidates willing to start a franchise with you. Many franchise opportunities make it the main criterion, which many times backfires on them. So, you should always consider other qualities and then look into the financial condition of the candidates. While choosing candidates, also take a look at their credit score. A good credit score ensures that the candidates can raise money from lenders easily than candidates with low or bad credit score.

brandEXPANSION’s development team can assist in all phases of franchise enhancement, including setting factors for qualifying franchisees. Contact us to learn more.