Franchising Advices

The Perfect Franchise Candidate


The chain is as strong as its weakest part, not as its strongest part.

How to choose the best franchisees is one of the most important problems of franchising. A lot of surveys show the correlation between the test results of the selection performed by potential franchisors and the actual financial results of their operation after that. Some testing systems go as far as trying to establish how many dollars of profit are equivalent to each point of the pre-selection test. It is indicative that in the USA only 4% of the candidates for a certain franchise are approved which shows that the selection of franchisees is a long and difficult process.

The question of the extent to which a candidate is suitable to be a franchisee is probably even more important for the candidate itself. Because it is the candidate who assumes the main part of the financial risk and if it does not meet the required profile it is very likely that it fails with the business management despite of using a tested business model, an established brand, advertisement support, proven know-how and the necessary training.

In case of inappropriate selection of candidates, the franchisor may suffer direct financial loss as well as lose considerable benefits. The failure will impede substantially the franchise development in the area, for which certain exclusivity has been granted. The losses could exceed by far the income from the initial franchise fee that will turn the assignment of a given franchise into an unprofitable undertaking. And vice versa – if as a result of the selection process enthusiastic, ambitious and capable people are attracted to the franchise chain they can contribute to the brand and business development.

Every franchise has its specifics and the design of questionnaires and the interviews with the candidates to buy the franchise should take them into consideration. The various parameters against which the candidates are evaluated may have different weight for the various companies and sometimes they may even be irrelevant. It is important to determine whether the selection will be carried out using a structured interview, a test, the BARS method or in any other way.

When designing the questionnaire, the answers should be formulated so that it is not obvious for the candidate what the answer is that you expect to hear. It is useless to ask for example: “How would you describe yourself? – A. Petulant, B. Revengeful or C. Well-balanced”. Besides that your questions should be specific and they should test actual qualities or skills. Why ask “Have you got general knowledge of the Balance Sheet?” if everybody could answer you “YES”? Instead, you could ask “What is a ‘reverse entry’?” and provide concrete definitions as possible answers.

In the end, ask yourself the question “Do I like this person?” Don’t worry – your subjectivism is a very objective factor. Whatever the test results are, if two persons do not like each other how could they do a joint business?! 

FRANCHISING.BG offers consultations and performs selection of appropriate franchisees.