Qualities and Traits of a Franchisee

If your dream is to become a franchisee and the manager of your own business, you're first going to have to impress a franchisor. While every franchisor looks for something slightly different, there are many qualities that all franchisors favour. Here, we take a look at ten traits that no franchisee should be without.

What do franchisors want?

1. Market insight. Franchisors want to meet applicants that have a thorough understanding of the market they’re entering. While you may have worked in other industries, unless you can demonstrate that the skills are transferable or relevant (which they usually are), they’re not going to impress too much.

You also need to be able to show that you recognise the main competition, see where the market is heading, and understand the potential obstacles in the way of the business’ success and growth. The key to this is research.

2. Finance and funding. If you're going to walk into a meeting with a franchisor and ask to become their newest franchisee, ensure you know how much it's going to cost you and be sure that you're able to raise the required funds.

Franchisors will want to see that you've got a good grasp of the numbers and that you're be willing to invest a bit of your own money in the project. Finally, they’ll also want to know that you recognise the fact that you’ll require additional working capital to see you through the first few months of business.

3. Compatibility with the franchise. Each franchise has its own specific set of characteristics and its own unique philosophy. Many franchises are more like highly functional family units, while others might be keener to maintain strict business relationships

Consequently, franchisors want to know that you've got the mentality to fit into their organisation. That means that you will need to share its ideals, vision, and goals.

Not only does this make it easier to know that they're picking an applicant that will thrive in the business, but it also suggests that they're choosing someone who isn't going to cause conflict if there are issues further down the line.

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4. An understanding of the franchise model. The franchise business model differs radically from most other types of business model. It requires a different kind of individual and a different kind of management style. Franchisors want to know that prospective franchisees understand this and that they recognise the franchise model places quite specific demands on everyone involved.

It’s also important for franchisees to understand that franchising has limitations as well as advantages. Its important for them that a franchisee appreciates this from the start and is content to deal with them. If not, the relationship between franchisor and franchisee will not last long before breaking down.

5. Franchise leadership skills. Though franchisees will be following the rules, standards, and procedures set out by the franchisor, they are still responsible for leading their own team and managing their own franchise unit.

This means that they need to demonstrate excellent leadership skills if they're to pass the application process and become a franchisee. These include:

• Organisation skills
• Communication skills
• The ability to make difficult decisions
• The foresight to set long-term and short-term goals

6. A willingness to follow the franchise model. As well as leadership skills, a franchisee needs to show that they believe in the franchise model.

Franchises succeed because they have developed a proven franchise model that can be rolled out across diverse geographical areas and still thrive. Franchisees need to accept this; franchisors don’t want to have to deal with a franchisee that thinks they know best or wants to overhaul the entire system radically.

7. Passion. Most franchisors are looking for an individual who can demonstrate a great passion for their industry. That means that if you're applying to open a fitness franchise, it's probably necessary to enjoy working out, and if you’re opening a vaping franchise, you’ll need to enjoy smoking an electronic cigarette.

No matter what franchise you’re attempting to join, if you don’t showcase your passion for the products and services, you’re going to struggle to make it.

8. A feel for marketing. A lot of people have acquired excellent business skills and commercial expertise, but few can apply this expertise when reaching out and communicating with potential customers. Marketing is all about communicating your business ideas effectively to other people. If you can do this, advertising your franchise shouldn’t be a daunting challenge.

9. Ability to network. In business, you’ll learn quickly that you need to be comfortable interacting with strangers. You’ll have to be prepared to deal with potential awkwardness at any time, as opportunities can present themselves at the most unlikely of times.

Whether it's getting a spot on a local radio talk show, organising charity fundraising events, or getting to know other franchisees at the annual conference, networking is a vital skill that will help you stand out from the crowd.

10. A connection. Finally, most franchisors will be hoping to get along with a potential franchisee. The franchisor/franchisee relationship is an essential component in the success of any franchise, and it's one that must be nurtured over an extended period.

Unlike traditional employer-employee relationships, the franchisor and franchisee exist on a more level pegging and have to commit to a minimum period of five years working with each other. If it’s not a good relationship, it’s going to be tough making the new franchise work.

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How do I secure funding to start a franchise?

For many, the main obstacle that is preventing them from opening a franchise is funds. Most franchisors require thousands of pounds from their franchise partners to cover franchisee fees, set-up costs and ongoing royalty payments.

If you’re struggling for cash, there are several different finance avenues for you to explore. Let’s have a look at some of the opportunities on offer.

1) Bank loan

Most bank lenders are willing to offer loans to small businesses with a sound strategy. They are even more likely to lend money to an entrepreneur who wants to start a franchise, given the extra securities that come with starting this kind of business.

Banks like Lloyds approve the vast majority of small business loan applications. Lloyds will provide £10,000 of short-term investment to help a franchise get off its feet.

2) Government small business loan

If you don’t want to go with a bank, the government offers start-up loans for new businesses. Depending on the size of your ambition, it will lend you between £500 to £25,000 worth of investment.

3) Private investment

Another option is to go down the route of courting private investment. With websites like Kickstarter and Lending Circle now available, you can crowdfund cash for your winning business idea by pitching it to investors online.

Do franchisees need previous business experience?

This is often the first question that prospective franchisees have when it comes to making the jump into the franchise business. It is difficult to give a set answer, as it completely depends on the specific requirements of each franchise.

While some larger franchises will require industry-specific experience from their franchise partners, others are content with more general experience in business. After all, business skills are transferable: somebody who has led a successful van-based franchise could well have the qualities required to start a car franchise.

Let’s have a look at what experience some of the franchises on our network demand of their franchisees:

Award Leisure

This outdoor leisure franchise does not expect its franchise partners to have previous experience in its industry. Instead, Award Leisure asks that all applicants have the following traits:

• Excellent management skills
• Stable business judgement
• Communication skills
• Sales ambition

One Delivery

This delivery franchise does not demand that applicants have experience in the fast food industry. With the minimum investment required standing at just £495, the ideal One Delivery franchisee only needs the desire to earn £30,000 in their first year of trade.

Dunkin’ Donuts

Dunkin’ Donuts is one of the largest active franchisors in our network. This worldwide coffee franchise expects all applicants to have previous experience in the catering industry, as well as long-term vision and the negotiation skills required to secure a high-value lease.

Do I have the right qualities to be a successful franchisee?

Different franchisors will prioritise different key franchisee characteristics. One franchisor might believe the most essential quality is the franchisee's ability to communicate with the customer, while another might prioritise market expertise. That means that there is a good chance that there is a franchise opportunity available that suits your skill set.

Despite this, most franchisors will want to take on a well-rounded individual who is capable in many respects. If you're having trouble preparing for your first meeting with the franchisor, try and go through all the franchise information available on their website and in their promotional material. That’s the best way of making sure that you've covered all the points listed above and go into the meeting confident in your abilities.