Company culture matters. In the franchise world, culture makes the network stronger and can contribute to the overall growth and success of a brand. Having a shared sense of values and goals between franchisor and franchise owner sets the tone for long-term success and finding the right culture when selecting a franchise is paramount.
Beyond capital requirements, arguably more important when considering a franchise is whether or not your unique skill sets and personality are compatible with the franchise organization. So, what’s the best way to evaluate franchise opportunities? How do you identify those compatibility traits? Here are the five steps to take to determine if a franchise is a match:
Create a foundation of trust.
This may sound obvious, but trust is not always achieved in environments that are not transparent. Mutual respect is a key component in the franchisor and franchise owner relationship. The franchise owner should truly trust that the franchisor has their best interest in mind. Just like with any relationship, not everything will be aligned at all times — but as a franchise owner, you should feel that the franchisor has the right intentions and is always focused on continuous improvement of the brand.
Watch out for red flags from the onset of discussions. For prospective franchise owners, if you are not receiving clear answers or you feel something does not add up, don’t ignore your intuition. If a franchisor is not forthcoming with connecting you to its franchise owners for input, that is a clear indication that it’s time to consider a different path.
Emphasize open communication.
Communication is key to achieving trust, and it’s important that it goes both ways. Franchisors rely on franchise owners to communicate openly and consistently with them to provide them with feedback from the consumer level.
This two-way communication is important as it helps the franchisor know what is working well, areas that could use improvement and when changes may need to be made across the system. When talking with franchise owners in a system, ask if this level of communication and collaboration is taking place and encouraged. Responses will tell you if there is a mutual desire for this synergy. Franchise systems should constantly be evolving and it is important for all stakeholders in the system to be on board.
Set clear expectations.
Franchisors should be clear with you about how much involvement is needed on a daily basis to properly position the business. Determine how your own personal work ethic and availability match up to the unique success drivers and requirements of that business. If key performance indicators (KPIs) include converting trial offers to memberships or occasional customers to frequent customers, businesses with absentee ownership almost always fall behind in these success metrics. It’s vitally important you understand the details of your prospective business model’s KPIs to understand your role in the business at the early stages of the conversation.
Generally speaking, a large majority of franchise models require active involvement, especially in the beginning. Franchising generally shouldn’t be considered a passive income stream. That doesn’t mean a franchise owner needs to be the store/studio manager, but it’s often not a “set it and forget it” model.Look at the concept. Some are more simple or complex than others. Understand how your skill set matches up to the success drivers of that franchise. Will your skill set propel you forward? Will your interests keep you interested in that business model for the long-term?
Look along these lines and thoroughly evaluate yourself and assess if it’s a good match in skills.
To read the rest of the article featured in Forbes by Matthew Stanton, Chief Development Officer of WellBiz Brands, Inc. and FIT36®, click here.