Avoiding 7 Franchisee Recruitment Traps*

*Note: Material for this article has been drawn from the research paper, Psycho-Social Predictors of Franchisee Success and Implications for Selection, by psychologists, Greg Nathan, Prof. Chris Jackson and Dr. James Allen, presented at the 22nd International Society of Franchising Conference in St Malo France.

While franchisors, brokers and consultants preach the importance of choosing franchisees carefully, our research suggests the majority do not use robust systems to assess franchisee suitability. In around 20% of cases this results in significant stress and expense for all parties, with the average cost of a failed franchise coming in at over $250,000. (This includes costs associated with attorneys, additional support, management stress and distraction, lost revenue and brand damage).

A significant underlying cause of poor recruitment practices is confusion over whether franchisee recruitment is about selling business opportunities or selecting suitable franchisees. In reality, sales and selection both form an important part of the franchisee recruitment process. But if we’re honest, there is often an emphasis on selling over selection.

We predict that the growing emphasis on “responsible franchising” around the world will see selection being given equal importance in the recruitment process. And we think this is a good thing for the future of the franchising sector.

With this in mind, here’s 7 common franchisee recruitment traps and some tips to avoid them.

#1: Treating a franchise like a product. Rather than a product to be sold, good franchise recruiters understand that a franchise is a long-term interdependent business relationship that will last an average of seven years. So they try to ensure candidates are a good fit for the business and that expectations are aligned, reducing the risk of unpleasant surprises later on.

#2: Falling for the halo effect. Candidates will often spin an impressive story about themselves, referring to their interesting backgrounds or past associations with well-known people or brands. Much of this will be irrelevant to their ability to run a successful franchise. So good franchise recruiters understand how to stay focused on what matters. They are clear on the information they need to know, and they use proven methods to get it.

#3: Overly distorting the positives. Biased or exaggerated representations by recruiters to make an opportunity look a lot better than it is, always causes later disputes. Good franchise recruiters ensure candidates enter the business with a balanced view of what’s ahead, and the expectation that their success will come as much from their own hard work as the support they will receive from the franchisor.

#4: Compromising quality to hit growth targets. Cutting corners and knowingly recruiting unsuitable people to hit short-term sales targets will inevitably create later problems. Good franchise recruiters maintain a long-term perspective on candidate suitability, respecting that their operations team peers will be working with this franchisee long after they may have left the business.

#5: Talking too much. Quality candidates will have done their research on your business. They will have read your website, viewed your videos and social media posts, and probably spoken with some existing franchisees. So, good franchise recruiters focus more on listening and responding to candidates’ questions and understanding their needs, than on pushing the features and benefits of the business.

#6: Not keeping good records. Because the franchise relationship has a strong legal component, it is vital that clear, accurate notes of all discussions are maintained for future reference. Good franchise recruiters follow systematic checklists and ensure that all communication is documented and easily accessed by others, should a dispute arise.

#7: Relying on irrelevant personality tests. Running a successful business takes more than certain personality characteristics. Good franchisee recruiters know the attributes that are needed, and use valid assessment tools such as structured interviews, behavioural anchored rating scales and on the job work samples, as well as relevant attribute profiling.