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Selective Franchisors Build Successful Franchise Systems

Being selective—based on an outline of criteria built into the core of the company culture—allows franchisors to choose the best possible candidates for franchise operation. It is true though that franchisees and franchisors interview one another mutually, and both simultaneously make an investment.  

Nonetheless, franchisors have the weighty responsibility of understanding their own company culture and the demands it places on any given franchisee. This understanding makes for a selective process that benefits both parties due to its realistic and responsible approach to expanding the brand.  

Selectivity requires that only well suited franchisees are taken on board, regardless of the franchisee’s financial portfolio and access to funding. Where funding availability is lacking and a particular franchisee is an obvious good fit for the franchise system, franchisors do at times makes concessions through the use of in-house financing options that open the door to franchise operation. Such financing programs benefit the right kind of franchisee for the company culture and function best when the focus is on quality expansion versus quantity of locations opened.

Training quality and selecting ideal site locations are two additional aspects of the franchise agreement that can greatly influence franchisee performance and thus the entire franchise system.  Training may be ongoing in various ways, whether through regularly visits, 24/7 corporate availability or online programs.  Paying special attention to how franchisors handle training, both initially and into the future, is as important for franchisees as the franchisors themselves.

Site selection often involves real estate availability and demographic research before finalized. Deciding on a site’s location involves bringing the ideas of both franchisor and franchisee together. Poor site location can deplete a well suited franchisee of business opportunities and gradually diminish success. Great site locations can increase brand awareness and bolster traffic opportunities.

The success of the franchise system must be considered over the course of years for a long term plan that is focused on stable profits over time. This approach cuts no corners and leaves no room for opening locations in haste.  It is to the advantage of incoming franchisees that their skills be thoroughly reviewed and considered, independent of their financial portfolio and then in conjunction with it.  

Franchisees can also investigate a potential franchisor’s commitment to excellence by inquiring about how the opening of each location is approved. Is the process of approval reasonable in duration, taking into consideration a variety of factors? Does it involve the input of various corporate leaders in different departments? Does it stand true to the franchisee’s own principles and is it a reasonable quality control routine followed for each location? All of these factors reflect on the franchise system and its commitment to integrity as well as each franchise investor. 

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