I want to be a Franchisee Part 1

By Beth Caron Nilssen
Thinking about becoming a franchisee? Excited about the opportunities out there but overwhelmed with what you need to know? We’re here to help: The Leadership Blog is presenting a series of informational posts about how franchising works. 

How do franchisors recruit franchisees?

Franchisee recruitment
Every franchise business wants to attract the best and the brightest to their systems. But it’s not just about getting candidates who have the right set of business skills or financial profiles. It’s also about getting candidates who are right for that particular business model and the culture of the organization. That’s why franchise companies invest significant resources into the process of identifying, evaluating and qualifying prospects. But before you can qualify a candidate-, you have to attract people to your franchise brand—in other words, recruit prospective franchisees. For Great Clips, that generally happens through three different paths: referrals, brokers and advertising.

Referrals: It’s who you know
Referrals are one of the most successful methods for recruiting new franchisees because it’s an indication that the prospect is already familiar with your business and that they like it well enough to consider investing in it. Referred candidates may know an existing franchisee; they may be a customer; or they may know an employee.

This is the primary way new Great Clips franchisees come into our system—approximately 60 percent of new Great Clips franchisees are referred by existing franchisees or salon employees. I often hear new franchisees say that they were attracted to the brand because of a friend’s success, or that they were sitting in the chair getting their haircut and had that “aha moment” and asked the stylist about the business. The fact that Great Clips is a bricks-and-mortar business—with thousands of storefronts across North America—offers great brand awareness and an opportunity to recruit prospective franchisees because of their own experience with a franchisee or in a salon.
 
Referral candidates are regarded very highly by most franchisors, especially when the referral comes from an existing franchisee. It’s an indication that someone who intimately knows the brand thinks this person might be a good fit with the company’s values and goals and also sends the message that the franchisee referring the business is happy with their own business.  After all- you don’t recommend a product or service to your friends if you’re unhappy with it! 

Brokers: Franchising matchmakers
Given the growth of franchise businesses over the past decade, it’s easy to understand how someone researching franchise opportunities could become overwhelmed. There are upwards of 3000 franchise businesses to choose from!  That’s where franchise brokers often enter the recruitment process.

Sometimes known as a franchise consultant or coach, a broker acts like an executive recruiter or a matchmaker—bringing together a prospective franchisee with a franchisor. Good franchise brokers educate their clients on the franchise industry in general, and  determine what might be the best fit among various franchise options by reviewing the candidate’s financial resources, interests and experience. It is good to note that franchise brokers will only present options to their client that are included in their “inventory”- franchisors who have an agreement to work with that brokers’ group.. 
Brokers are generally paid by the franchisor once their referred candidate signs an agreement. Approximately 20 percent of Great Clips franchisees come to us through franchise broker relationships.

Advertising: Making an impression
The third way prospective franchisees find a business is through advertising. On average, candidates usually need to have 6-8 positive impressions of the brand prior to reaching out for more information, so the key is to be seen by the right people at the right time and in the right place. One way to do this is through paid advertising—placing ads online or in business related magazines or newspapers. There is no “silver bullet” but the right combination of impressions (in person or ads) eventually leads to prospects wanting to learn more.  

There’s also unpaid advertising, including storefront signage, community involvement, trade shows, company websites, and social media (like this blog or a LinkedIn group).

What then...
Finding prospective franchisees is just the first step in bringing a new franchisee into a franchise business. In the next part of this series, we’ll explore what happens once a prospective franchisee enters the qualifying process. Stay tuned!