How to find and manage franchisees

It is estimated that some 383,000 people are directly employed in the franchising sector. But finding good people, and the right people, to run a franchise of your business won't be simple. It will take research, probably some investment in the form of advertising or taking exhibition space, and require you to become something of an HR expert. Consider it a challenge - and think of the potential revenue stream.

  • Make an exhibition of yourself
  • How long will it take?
  • Outlay and finance
  • Relationships matter

Make an exhibition of yourself

When it comes to recruiting, there are shortcuts that come in the form of national or even international exhibitions, such as the annual National Franchise Exhibition held at the NEC in Birmingham, the British Franchise Exhibition held at the G-Mex, Manchester, and the British & International Franchise Exhibition, held at London's Olympia. For details on all, visit www.franchiseinfo.co.uk, plus there is the British Franchise Association (www.thebfa.org) that has a lot of information and advice. Exhibitions are a chance to stake a stand, promote the business, meet people looking to take on a franchise and see what the competition are up to. All the big events have major newspaper backing in the form of the Daily Mail and Daily Express and as a result are well attended.

  • Attend as many exhibitons as you can
  • Make your stand promininant and self promote

How long will it take?

The British Franchise Association reckons it takes a franchisee, on average, four months to decide to purchase a franchise and a further two months to be trained and set up in business. Meaning it will take you, as the franchisor, six months to recruit the first franchisee. Some sectors take longer than others, with hotel and catering franchise operations taking around 7.5 months. This reflects the delays associated with finding and securing the premises. On the other hand, transport and vehicle-related franchises take on average just over four months to find franchisees.

  • Don't expect for your business to grow overnight

Outlay and finance

Apart from finding suitable, capable people, getting the financial backing they require could be a further barrier. Banks continue to be the most important overall source of finance. Around half of franchisees borrow money to set up and of these 81% borrowed from the banks. A survey by NatWest and the British Franchise Association found the average initial outlay for setting up a franchise is £64,900.

  • It may take a while for franchisses to get their funding secured.

Relationships matter

It is the relationship between the franchisor and franchisee that will be critical for success. The NatWest survey found that the majority of those that were dissatisfied with the relationship were also loss making.

  • Work hard to establish a relationship with your franchisee
  • Keep up to date and communicate with your franchisee on a regular basis

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