9 Most Common Reasons for Being Rejected as a Franchisee

If you’ve spent weeks or months finding your perfect franchise opportunity, completing application forms and attending meetings and interviews, being rejected as a franchisee candidate can be incredibly disheartening. This article identifies the top reasons for franchisee rejection and offers some tips for future franchisees.

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Becoming a franchisee isn’t always as easy as you might think. Even if you believe you have all the qualities of a perfect candidate, the franchisor has final say over whether you can join their company. Running a franchise unit involves a large number of skills and attributes, and business owners can be highly protective of their brand.

Whether you’ve already been turned down for an investment opening or if you’re just nervous about your application, knowing the most common reasons for franchisee rejection can help you succeed.

The top 9 reasons for being rejected as a franchisee

The British Franchise Association (BFA) regularly conducts research into the franchising industry, in collaboration with NatWest bank. One of their most recent studies revealed the top factors causing franchisors to turn down a franchisee candidate.

Here’s our run-down of the main reasons for franchisee rejection and how you can sidestep the issues during your recruitment process.

1. Insufficient capital (61 percent)

As most franchise opportunities require investments of thousands of pounds, it’s not surprising many people struggle to afford the initial payments. However, there are options if you think you don’t have the cash to become a franchisee.

The franchise industry is fairly inclusive for those with limited funds. There are plenty of low-cost investment opportunities in the UK, and many banks are willing to lend franchisees up to 70 percent of the initial cost.

Point Franchise is dedicated to helping savvy investors start their own businesses. Read our guide on franchise costs and fees to get a better idea of your financial obligations as a franchisee. Or see our article on franchise financing to find your ideal lending solution.

If you’re really strapped for cash, take a look at our guide on financing a franchise without money.

2. Performance at interview (57 percent)

Franchise interviews can be just as daunting as standard job interviews - mess up, and you’ll miss out on your chance to launch your own business under the company’s branding. Preparation is key, as you’ll need to convince the franchisor you’re capable of building a successful business and representing their brand effectively.

Our guide on the topic reveals how prospective investors can make the most of their interview.

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>> Read more:

• Recruitment: Why Your Employees Are The Face Of Your Brand
• 10 Ways to Boost Employee Happiness, Engagement, and Satisfaction
• Improving your franchise recruitment strategy
• Tips for Recruitment and Selection
• Tips for Managing Employee Turnover
• 5 Effective Employee Engagement Strategies for Your Business

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3. Lack of business acumen (52 percent)

Unfortunately, it’s quite difficult to develop good business sense if you don’t already have it. Unlike knowledge and skills, basic attributes like business acumen and a proactive attitude are often innate and cannot be learnt.

To minimise your chances of being rejected as a franchisee, try to demonstrate your suitability: your passion for the industry, commitment to the brand and dedication to achieving business success.

4. Seem to be just buying a job (38 percent)

Franchisors want to be confident their chosen candidates are enthusiastic about becoming a franchisee and aren’t just halfheartedly applying for the role as an alternative to pursuing another job. The best way to avoid giving the impression you’re not completely dedicated to franchising is to understand the industry inside out.

See our article, Franchising 101: What Exactly Does a Franchise Owner Do? for more information.

5. Failure to turn up for appointments (35 percent)

This factor is easily remedied - only apply to brands you’re truly passionate about and make a note of the meetings you’re asked to attend. Missing or being late for just one appointment without a reasonable excuse could give the franchisor the impression you’re not taking the franchisee recruitment process seriously.

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>> Read more:

• 6 Tips for Recruiting Specialist Franchisees for Niche Sectors
• What Franchisors Look For When Recruiting
• Tips for Recruitment and Selection

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6. Poor credit history (33 percent)

It can be difficult to join a high-cost franchise if you have a poor credit history, but there are ways to move forward if you’re committed to becoming a franchisee. Concentrating on low-cost opportunities could give you the chance to avoid borrowing money from official lenders.

Our article, How to Start a New Business on a Shoe-String Budget, lists the alternative funding methods you could investigate as a franchisee candidate with a poor credit score.

7. Inability to complete application forms (28 percent)

Here’s another factor you can easily avoid. Taking the time to complete application forms properly is the first step in showing the franchisor you’re serious about joining their brand. If you have questions or need help with it, you could get in touch with a franchise solicitor, existing franchisees or even the franchisor themself.

8. Lack of sales/marketing experience (21 percent)

Having a lack of experience working with sales and marketing processes is hard to overcome unless you spend time in a relevant role before reapplying for the franchisee position.

However, according to the BFA-NatWest survey, almost two in three candidates who are new to franchising are employed before approaching an investment opportunity. It’s unlikely they were all working in sales and marketing roles, so the findings suggest there are many franchisors who approve applicants without experience in this area.

Try looking at alternative franchise openings if you’re turned away for a lack of sales experience.

9. Lack of industry experience (17 percent)

Like the point above, having a lack of experience working in the industry can be a deal-breaker for some franchisors - but not all. The BFA-NatWest survey revealed just 28 percent of investors who are new to franchising have worked within the relevant industry before.

Clearly, many franchisors are happy to hand over their brand rights to people from diverse business backgrounds. Afterall, that’s what training schemes are for. Look out for different investment opportunities to continue your search.

Reduce your chances of being rejected as a franchisee

Hopefully, this guide has given you the information you need to maximise your chances of being approved as a franchisee applicant. To get a greater understanding of how to flourish as a business investor, read our article on the seven common habits of successful franchisees.

You can find more informative articles right here at Point Franchise. Or use the main menu to identify your ideal investment opportunity.