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Is franchisee enquiry dropping?

Written by: Rod Young

Article Overview: Some anecdotal evidence has suggested franchisee enquiries have declined within the Australian market over the past year. Closer inspection reveals a more educated and discerning franchise buyer, and a need to refine recruitment processes and strategies.

Is franchisee enquiry dropping?

Some anecdotal evidence has suggested franchisee enquiries have declined within the Australian market over the past year. Closer inspection reveals a more educated and discerning franchise buyer, and a need to refine recruitment processes and strategies.
The DCS view that the franchisor’s get the franchisees they deserve is all too true. In a market of near full employment, interest rate uncertainty, and high salaries uncertainty only the better developed franchises with a value proposition for the franchisees in the top quartile of the market will succeed. The franchisee market, both primary and secondary, is still growing within Australia and new quality emerging systems such as ANZ Mortgage Solutions, Grill’d and Healthy Habits demonstrate the propensity for this trend of ‘being your own boss’ to continue if you have a compelling offer and a quality recruitment process for prospective franchisees.
The combination of a cooling economy and the recent Lenard's court case has prompted many franchisors to review their recruitment strategies and processes. Experience indicates focus, people incentives, process inconsistency, complacency and needless exposure to litigation risk are all contributing to some poor results for franchisors in a very competitive market for the best franchisees.

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Related Forum Posts
Dispute between Supplier and franchisee - This very much depends on the attitude of the franchiser. A good franchiser would be more than a little concerned about a franchisee not paying the bills purely from the perspective that it might tarnish the brand name. However, be aware that this might be struggling franchisee with a company that couldn't give two hoots about you being owed money. Personally I would be inclined to approach the person first and inform him or her of your intentions to talk to the franchiser before you actually do. This at least gives the franchisee the chance to rectify the situation.
Re: Surety bonds - I know quite a bit about Surety bonds as they relate to Freight Brokerage companies as they are quite common and required for most US based operations. But before I bore everyone with my wealth of knowledge on this topic, please clarify the specifics of your enquiry and you'll get some more assistance. Your industry would help as well...
Dispute between Supplier and franchisee - The franchisee is a totally legally separate entity from the franchiser, and frankly it is no business of the franchiser. And the most important reason you are also likely to totally alienate the franchisee. I don’t know enough about your relationship with franchisee to comment on the rights and wrongs: but I do know this - If there was even an ounce of "right" on my side in the non payment, and certainly if my problem was the franchise model was not working, I would make it my mission to delay payment all the way to the courtroom door anyone who was so sneaky as to go behind my back to the franchiser.
Franchise Territories - [quote="franchisebrief.com":1dfdbmhp]This information will be included in the UFOC. If the UFOC states that there is no protected territory, then I would be suspicious. If UFOC states that each franchisee will have its own territory, then there should not be any problem.[/quote:1dfdbmhp] Any franchises that I'm familiar with have a territory or distance provision that prevents franchisees from overlapping their territories. This is only a problem when you have an underproducing franchisee - but they should also have a provision to give a franchisee a set amount of time to make a go of the location and territrory. Shri
Re: Franchising Brokers vs Franchising Consultants - Franchise consultants are free and work with you without any obligation. they do not work for any one franchise but do get a percentage of the franchise fee when a franchisee that was registered with the franchise came from the consultant and the franchisee signs. They will try to match up your interests and skills to franchise businesses that are right for you. They can explain franchise guidelines and help you in any way they can. Franchise brokers usually get paid by the client and/ or franchise (generally get some type of commission). Additionally, they can get points or referral fee off the deal if they refer you to a lending resource too after they sell you on a franchise. Typcally they will try to sell a prospective franchisee on a larger deal so they get a larger commission.


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