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The franchisee must be mature but young enough to be hard working, a good manager, but not a person who will “rewrite the book”.
The franchisor will normally receive some kind of an inquiry either by way of
letter or telephone call from a prospective franchisee. Franchise magazines, when used correctly, can generate inquiries for your franchise network. The combination of advertising and extensive use of web listing sites can enable many franchisors to succeed. There are now a multitude of mediums where you can promote your franchise ranging from franchise exhibitions, franchise magazines, franchise websites, and even the national press.
The franchisor then responds by sending out a glossy presentation with details in relation to the franchise company and its particular success story. The package should be accompanied by an explanation of what the franchisor does in terms of setting up the franchisee and continuing to service their needs afterwards. Financial projections are usually also dispatched with the initial material. The franchisee is invited to complete an information sheet which provides the franchisor with details about the potential franchisee. This will then be accompanied by a letter inviting the franchisee to contact the franchisor to discuss the matter.
Many franchisors develop what they call a franchise profile in terms of the type of person they would like to see as a potential franchisee. You need to develop criteria as to the type of person you would like to see as a franchisee. It is important that a potential franchisee have adequate financial resources.
The franchisee must be mature but young enough to be hard working. When someone is thinking of taking on a franchise, it is important that they have the support and backup of their spouse or partner. Some franchisors consider it important to have at least one meeting with the potential franchisee and their spouse. The potential franchisee must be independent enough or motivated enough to be able to run their own business, but not so independent that they want to break away from the franchisor.
The franchisor will usually develop a book keeping system for the franchisee in order to simplify the accounting procedure and the financial reports to be made to the franchisor. It is also usual to find that the franchisor will get involved in the initial promotion of the franchisee’s business, and marketing, and will give the franchisee assistance for a limited period of time. It is normal to provide a representative on site for a week or two.
It is important to have the resources available in terms of manpower, to provide this service.
Location is very important to most businesses. Because of this, you or one of your agents should be heavily involved with selecting good locations for franchise stores. Develop site selection criteria and a site selection approval form to help the franchisee choose a good location.
Develop a comprehensive program to train franchise managers and employees, support and monitor your franchisees. Develop a continuous improvement program.
You should also have some arrangement with a bank whereby you can give some kind of financial information or loan information to potential Franchisees.
Initial Meeting with Franchisee
Any prospective franchisee that attends a meeting should be given an initial prospectus. Within this you should provide more detailed information on:
The background of the franchise:
Who are the principals:
What the franchise business does:
How the franchise business does it:
What the franchise opportunity consists of:
How to get in touch with the sales staff:
Financial statement for prospective franchisee to fill out and then return:
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