Since the success of the whole franchise network depends not only on the franchisor’s efforts, but also on commitment and the results of every franchisee in the network, it is extremely important to choose competent, motivated and passionate franchisees. The aim of the franchisee recruitment process is simply the same.
A ratio of conversion of the leads to franchise agreements is used evaluate the efficiency of franchisee recruitment. Many franchise experts state that only 1 of approximately 100 interested persons will become a franchisee. It is natural that every franchisor seeks to increase this ratio as much as possible, to accelerate the growth of the network and use less resource for the marketing of the franchise, as well as franchisee recruitment, evaluation and communication with them. However, in terms of franchisee recruitment quality, another ratio is used. It is the net growth of number of franchisees in the network. This ratio is calculated by deducting the number of franchisees that have left the network during the reference period from the number of all new franchisees. The larger is the said ratio, the healthier and more attractive the franchise network is. So, in order to achieve the long term stability and success of the franchise network, the franchisor must construct such a franchisee recruitment process that balances the values of both the conversion ratio and the net growth of number of franchisee in the network.
The main methodical tool for the management of the franchisee recruitment process is the franchisee recruitment operations manual. The aim of this operations manual is to regulate in detail the actions of the franchisor from the reception of initial enquiries to the signing of franchise agreement. Typical franchisee recruitment manual defines processes, procedures and actions as well as related documents, templates and forms of the following franchisee recruitment steps:
- Receipt of the initial enquiry,
- Registration of the candidate,
- Filling in the candidate application form,
- Initial assessment of the suitability of the candidate,
- Sending of presentations – franchise brochures,
- Meeting the candidate,
- Signing of a non-disclosure agreement,
- Disclosure of more detailed information about franchise,
- Initiation of preparatory works of the candidate,
- Evaluation of premises proposed by the candidate,
- Evaluation of business plan prepared by the candidate,
- Evaluation of the reliability and financial capacity of the candidate,
- Negotiation over the franchise agreement,
- Approval of the sale of the franchise,
- Signing of a franchise agreement.
In addition to the description of processes, this operations manual should also include a detailed profile of the franchisee. This profile is used both to define the criteria of assessment and selection of interested persons and to specify franchise marketing actions and measures in such a way that they could have the greatest influence on the future franchisees.
This stage completes the franchisor’s business set-up stage. Now you are fully prepared to bring your franchise to the world and start expanding your new franchisor’s business.