Tweet

Awarding a Franchise Semantics or Not

Written by: Rick Bisio

Article Overview: This article explores the nature of the franchise relationship. It discusses the commonly used term - Award a Franchise - and explores the importance of this perceptive in for formation of a healthy franchisor/Franchisee relationship.

Awarding a Franchise Semantics or Not

Are franchises “bought”, “sold” or “awarded”? Is the franchisor’s representative in the “franchise development” department or “franchise sales” department? This may seem like semantics but it is at the essence of what a successful franchise relationship is all about.

If you “buy” a franchise it would imply that you have control over the process, much the same as if you were buying broccoli at the grocery store. You simply appraise the various franchises that are available then walk up to the cash register and “buy” the franchise.

If a franchisor “sells” you a franchise it could bring to mind dealings you might have had at a used car lot. You would face a heavy handed sales person whose intention is to ‘close’ the deal knowing, of course, that they will never see you over again.

The good news is that you should have neither experience in today’s franchising world. Today, high quality franchisors focus on “awarding” franchises to the best candidate. The franchise development person’s job is to bring a partner for the franchisor - someone who demonstrates potential to be thriving in that particular franchise system.

The term “awarding” came into widespread use in the 1980s. It reflected franchisors’ collective realization that it was in their best interest to work with quality franchisees who would present assets to the brand.

This is a logical change from the early days of franchising. When franchising was young, many franchisors thought that if they provided a successful model and adequate training, anyone could succeed. While the model and training are decisive, the other key ingredient is the franchisee. An introvert in a business that requires extroverts, for instance, would tend to struggle, and that doesn’t help anyone. Quality franchisors want happy and prosperous franchisees as they make the system flourish. Even a superior business model run by a brilliant franchisor could fail if it was populated with the wrong franchisees.

Today, you should never feel that you are being “sold” or that you have the simple option of “buying”. As you gather franchise information and investigate franchises, you should have the experience that the franchise development person is investigating you, too. S/he will investigate your skills, your priorities, your past experience, and may look into weak areas so that you can work together to decide if they are issues. You might even be given a skills or personality inventory, which will compare your scores to those of successful franchisees already in the system. The franchise education process will be one of reciprocal discovery.

When you find the system that’s good for you, and you reach the end of the discovery process, you should have the belief that you will be working with people you like and trust, and who share your drive to be successful.

Related Articles
  Franchising with all its Success
  About 60% of all franchise opportunities have less than 50 units.
  Why Use a Franchise Consultant?
  Did you know: NIIT Franchise was present in Malaysia in 1997?
  Does Size Truly Matter?

Article Tags: 1980s, best interest, broccoli, business model, car lot, cash register, collective realization, franchise development department, franchise relationship, franchise sales department, franchise system, franchisee, franchisees, franchises, franchisor, grocery store, introvert, sales person, semantics, world today



Related Forum Posts
Re: Enticing Franchises - Top 9 List - All Franchise listed above are in millions of dollars. Do you have the list of Franchise in thousands
Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
how much for a franchise fee? - Dear Colleague There is no easy answer to this question. Things to consider: [list=] The sizeof the Franchise Clent base Expected Turnover Intellectual Property costs (recoup) Number of Franchises Number of employees Original Set up costs Franchise admin costs An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000. Hope that this gives you some idea Take care Ian[/list]
Re: Franchise Surveys - Another good tool to researching a franchise is to speak with their existing franchisees. This contact information is included in most Franchise Disclosure Documents. In order to get a Franchise Disclosure Document or FDD as it is often referred to, you will have to complete a basic franchise application. The franchisor will then usually provide you with the FDD at that time. Included in that book of information is a list of the existing franchisees, the contract, the investment information etc... This information is required by Federal Law to be disclosed to your prior to making a purchase. So be sure to do your research and start with the Franchise Documents to get the initial information.
Re: Info for would be franchisers... - [quote="Sebastien":2gam0klq][quote="BuzzAroundBooks":2gam0klq]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to.[/quote:2gam0klq][/quote:2gam0klq] That is really what I look for in any industry publication. We lead busy lives and when people fill their magazines with fluff, not only does it benefit no one, but it makes us truly appreciate those that don't. Thanks!


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Selling On Ebay The Good The Bad And The Ugly

The Substance Abusing Employee

What is Discretionary Cash Flow

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.