What franchisors want from franchisees

What do franchisors look for in prospective franchisees? Andy Hirst, head of franchise development at Domino’s Pizza, reveals all

Franchising offers fantastic opportunities for entrepreneurs to make their mark in the business world, with many specifically choosing this route as a means to opening multiple units and maximising returns. With growing numbers of people turning to franchising, what do franchisors look for in prospective franchisees?

According to the British Franchise Association, there are almost 900 franchise systems currently operating in the UK. With this many different franchises available, from pet sitting to pizza delivery, it’s fair to say that not every franchisee will fit the bill for every franchise. Good franchisors spend a great deal of time ensuring they choose the right people for the job. This not only gives the franchisor peace of mind in knowing they’ve brought the best personon board, but also sets the new franchises up to succeed and make their business profitable, sustainable and rewarding.

Determination
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Passion and determination are the key things we look for immediately in any prospective franchisee. A new franchise will take time and hard work to get off the ground so it’s essential that our new franchisees really love and believe in what they are doing. It needs to be a venture the new franchisee wants to succeed in and be happy to spend a great deal of time and effort on every day.

Choosing the right franchise based on what a new franchisee wants to achieve from their new venture is also essential. It’s key to ensure both their - and our - expectations are met from the outset. There’s no point applying to run a full-time franchise if you want to fit it in around school runs or just work in the evenings.

Franchisees should think about their lifestyles and why they want to go into franchising - are they doing it to improve their prospects and earn the rewards of running their own business or simply to be able to spend more time with their family? It’s important to find out how any franchise operates and its potential returns to see whether it fits with what the prospective franchisee is hoping to achieve.

Similarly, as the franchisor we’re always up front with what we expect too. When we take on any new franchisees we insist they’re hands-on and involved in every aspect of their business. We don’t want franchisees who will sit in the office every day, we want people who thrive in the in-store environment. We need to be sure that our franchisees have the time and commitment to really give their franchise their all.

Knowledge
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One of the things that isn’t a prerequisite for new franchisees is a detailed knowledge of the industry. As long as they have a passion for the business, good franchisors can usually teach new franchisees everything else they need to know. At Domino’s this includes a comprehensive franchise development programme and full ongoing support from a skilled head office team.

However, many franchisees do already have expertise from their previous jobs that can be applied to their new franchise. For example, franchisees from the forces typically have a great sense of determination, leadership, teamwork and camaraderie, which is essential to the operation of a Domino’s store and can be great for staff morale and retention too. New franchisees with management backgrounds can be good at motivating teams, some have experience of marketing, while people from hospitality backgrounds may relish dealing with customers and working in bustling environments.

In addition to skills and training, Domino’s aims to provide new franchisees with everything they need to grow a successful business. We’ll help new franchisees find a suitable site for opening their new store, gain planning permission and assist with everything from ingredients to IT systems. We just need enthusiastic and committed franchisees who can hit the ground running.

Funds
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Another key consideration for any franchisor when recruiting a new franchisee is whether they have access to the required funds. The cost of a new franchise varies depending on a range of factors such as the type, industry sector and assets required to get the business up and running. While new franchisees will need to have liquid funds available, additional funding can typically be sought from banks with a solid business plan.

Most lenders will have a ‘preferred’ list of franchises they are usually happy to lend to, based on the franchisor’s track record and success to date. Proven winners are much more likely to attract lenders and, in most circumstances, franchisors should be able to help new franchisees speak to banks to get the investment needed.

Franchisors will also take a longer term view when looking for new franchisees. We’re committed to finding new franchisees who follow our aims and ambitions. At Domino’s, we’re opening new stores at a rate of 60 a year, so another key consideration we use for new franchisees is their hunger for growth. We’re keen to find franchisees who want to expand with us and go on to become multi-unit franchisees with a number of stores, so this is something else we bear in mind when recruiting new people.