Can I Qualify for a Franchise?
By Steve Hockett
Although it may not be immediately evident, a franchise company is under no
obligation to award a franchise to just anyone who can afford the franchise
fee.
Like any good business, a franchise company will want to populate their system
with great people. Since franchising has as its foundation a strong, consistent
brand, a franchisor looks for franchisees who will present the brand in the
most positive light. In the same manner, they will want to have only those
people as franchisees who are able and willing to learn the system and work
within the specific parameters of the business.
When researching a franchise company, you will find that they may have as many
questions about you as you do about their company. A franchisor is putting
their time, money and reputation on the line, so most have developed a
“profile” of a successful franchisee which they use to determine if you are
“right” for their business.
While this may sound exclusionary, franchisors have a very good reason to learn
what works and then to stick with it. Successful franchise companies want their
franchisees to excel. They have refined their systems around a set of standards
they have learned franchisees need to thrive.
These are the most common items a franchisor looks for in a potential
franchisee:
-
Capital.
This is one of the first hurdles you’ll encounter when trying to qualify for a
particular franchise. Most franchisors have a minimum net worth and liquid
capital requirement for their franchisees. While this may seem obvious, there
are other demands on cash availability beyond the initial costs of the
franchise – such as the length of time it will take your business to start
making money and the living expenses you will have during that time. There are
financing options available that may help you qualify if you are short of
capital, however no good franchisor will want to see you start out your
business heavily in debt.
-
Personality.
There are some personality characteristics that seem to be common in all
successful franchisees. Other characteristics are specific to individual
businesses. Are you willing to follow a system or are you the type who wants to
do everything your own way? Do you enjoy working with people? Are you focused
and decisive? Do you enjoy solving problems? Are you willing to work hard?
These are some of the questions a franchisor may have for you and your answers
will determine not only if you can qualify for a particular franchise but also
if you will be a successful franchisee.
-
Skills.
Your skills are closely related to your personality. If you like working with
people, chances are you will be good at it. Are you customer service focused?
Can you lead a team of employees? Can you set and meet personal goals? Do you
understand financial concepts? One attribute required by most franchisors is
that you have business acumen and understand how the parts of a business
contribute to the whole.
-
Experience. Franchising is one area of business where your
specific experience is less important than other factors. That’s because of the
excellent training provided by most franchise companies. In truth, many
franchisors prefer franchisees without industry experience because it is easier
to train someone in a franchisor’s system than it is to “un-train” a franchisee
who has ideas that may conflict with the way a franchise system works. Again,
it is the overall business experience you’ve attained through life that will
make you a “star” in a franchisor’s eyes.
The goal for every franchisor is successful franchisees. As much as you may want
to qualify for a franchise opportunity that interests you, remember that the
franchisor has the background and experience to know what type of person makes
a good franchisee in their system.
If you encounter a franchise that doesn’t discriminate when choosing franchisees
– look out. They’re just going for volume and hoping some of the businesses
succeed. Stay clear of these companies as they will not be vested in helping
you achieve your long term goals.