3 Do’s and Don'ts for Franchisees
It turns out becoming a franchisee can be harder than getting into an Ivy League college.
Overall, fewer than 5 percent of people who have applied as a prospective franchisee and worked through an online tutorial to learn more about a brand end up purchasing a unit, according to an analysis of more than 620,000 inquiries by the franchise development firm Process Peak. (In case you were wondering: Princeton's admission rate is less than 8 percent, while Harvard's sits at 6 percent.)
While some prospective franchisees lose interest for some reason or another part way through the process, experts warn many simply fail to impress the franchising team at corporate headquarters. To better your application's odds, here's what franchisers themselves say will raise--or sink--your chances at opening one of their new units.
1. Stick to the truth
Some companies employ software that ranks a candidate based on responses to questions about their net worth, past business experience and other criteria. "Hot" leads rise to the top, while the "cold" ones drop down.
But don't inflate numbers or sprinkle your responses with fibs to increase your chances. The truth "all comes out in the conversation, background investigations and talking to their references," says Andy Cucchiara, vice president of franchise operations at ZIPS Dry Cleaners, who adds that credit and criminal background checks are just the start.
2. Get spousal buy-in
Franchisers with this reassurance feel it's less likely a partner will force you to pull the plug on an operation at some point if you're struggling or overworked. Sometimes, like at ZIPS, this means you'll have to bring your spouse with you during a "discovery" day interview so that executives can vet their interest and see how supportive they are.
3. Consider a 'tryathalon'
Internships or short visits are mandatory at some franchises, like at Moe's Southwest Grill, where prospects who pass an initial screening are invited to spend just over a day--at their own expense--to learn about the company's brand and meeting with its department heads. "People who come to Atlanta for a tryathalon--99 percent of the time they'll sign a deal with us," says Paul Damico, president of Moe's Southwest Grill.
1. Be a stranger
Passed the preliminary application? The evaluation for many in-person interviews--which often occurs over dinner--boils down to how personable you seem. "At the end of the day, is this someone I could see inviting over to my home?" says Brian Scudamore, the founder and CEO of 1-800-Got-Junk? "You want to be working with people you like."
This test also means you'll be under scrutiny to see how you treat wait staff. "We watch how [prospectives] engage with waiters and waitresses--whether or not it's more of a collaborative discussion when they order or genuine friendliness," says Sean Bock, vice president of development and real estate at Fun Brands.
2. Get too creative, too early
Franchisers typically don't want owners who suggest big changes to a proven concept. They "definitely want people who will follow a system," says Paul Segreto, CEO of The Entrepreneur's Source, which helps prospective franchisees find the right fit. "That's why a lot of the people we see in franchising are veterans--because they're used to operating in a regimented system."
3. Overplay your commitment to work (unless it's true)
Sounds counterintuitive, right? Well, at Anytime Fitness, potential franchisees are tested to see how they'll react when executives talk about "ROEI"--or a Return on Emotional Investment. In other words, says the company's CEO Chuck Runyon:
"If their eyes light up when we talk about leading a balanced life--when you don't have to be tied to the gym all day and you can go to your kids' ballgames, and they get excited about positively contributing to their community--then I know that the prospect is the kind of person we want representing Anytime Fitness and owning one of our gyms."
And who says you can't strike a work/life balance?