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Business View Magazine
18 Business View – October
Francising
to help identify their strengths and weaknesses for
running their franchise business.
“We are big fans of personality profiling to identify
people’s natural orientation and match it to the core
skills and attributes of our successful owners. We can
use the profiles to help coach people, or other times,
it identifies when someone is absolutely no match for
our system,” said Paul Davis’s King.
Bevintel uses a different tact to ensure franchisees are
a good match in their system. They recently launched a
“franchisee in training” program, which enables people
who are interested in the industry (inventory control
for bars and restaurants) to work with top-performing
franchisees, commitment-free, for up to two years and
then transition into owning a franchise of their own.
“They come in as franchisees in training where they
learn all levels of the business and operate all levels of
the business,” Smith said. “Then, they move on and get
their own franchise territory.”
A good franchise company will make sure you not
only fit with the culture of the franchise but also have
enough liquidity to fund your start-up and to run
the business. Money, however, doesn’t necessarily
guarantee success or failure.
“We’ve had people that barely qualified and turned
out to be fantastic franchisees, and we’ve had people
with loads of money who failed,” said Ron McCoy, vice
president of business development at Help-U-Sell, a
specialty real estate franchise.
Most of the CEOs we spoke with for this report don’t
require previous experience in their specific industries,
but they all require passion for the franchise business.
CruiseOne, for example, expects potential franchisees
to have an exhibited passion for travel. HomeWell
Senior Care looks for franchise candidates committed
to working with the aging population.
“The care piece is the most important for us,
everything else is secondary,” said CEO Yount.
Franchisee Satisfaction
Before buying any franchise, it’s important to make
sure franchisee satisfaction and performance across the
board is solid. Undoubtedly, you will run into a few
unhappy franchisees in any franchise brand, but broad
satisfaction research, like the independent reports
provided by Franchise Business Review, is that must-
have, 3rd-party validation required before moving
forward with a franchise opportunity. When talking
to any franchise company, ask to see their satisfaction
report.
The 100 companies listed at the front of this report
excel in franchisee satisfaction based on recent surveys.
In general, the average franchisee satisfaction score for
all low-cost franchise companies is three percentage
points higher than for brands costing more than
$100,000, and franchisee satisfaction within our 100
top low-cost franchises is even higher.
Low-cost franchise owners rate their franchise
companies higher in every category of our survey than
do franchisees at brands costing more than $100,000.
The most significant difference (4 percentage points) is
seen intheareaof FranchiseTraining&Support. Included
in the Training & Support category are questions about
a franchise company’s marketing and technology, so
the high satisfaction in this area may prove low-cost
doesn’t necessarily mean fewer resources available
from the franchisor. The highest rated categories in our
franchisee satisfaction survey are Core Values (of the
franchisor) and Franchisee Community.
We recommend prospective investors carefully look
at a brand’s franchisee community and ask current
operators specifically about it while they’re conducting
their research. Especially at the low-cost level, the
franchisee community may play a big part in terms
of advice and ongoing support, and it can greatly
influence the overall enjoyment you get from running
the franchise business.
In the category of Financial Opportunity, low-cost
franchisees are slightly more satisfied than franchisees
of more expensive brands, even though their average
annual income is approximately the same as our overall
franchise benchmark ($78,009 vs. $79,684). (It’s
important to note that while the average income may
be the same, the return on investment may actually be
significantly higher on a percentage basis because the
investment is so much lower.)
The lower-risk nature of low-cost franchises is
