15 Franchisor Responsibilities to the Franchisee

Franchising is a powerful route for business expansion and entrepreneurship in Canada, with franchisors and franchisees playing pivotal roles in this dynamic relationship. The success of a franchise system depends significantly on the franchisor's responsibility to provide support, guidance, and resources.

Here, we look into franchisors' essential responsibilities towards their franchisees, highlighting how these duties ensure compliance and operational efficiency and foster growth and mutual success.

1. Providing Comprehensive Training Programs

Training equips franchisees with the necessary skills and knowledge to operate their franchise successfully. The franchisor's key role is to ensure that franchisees are well-prepared to meet the brand's standards and customer expectations.

Initial and ongoing training: Beyond initial training sessions, continuous education on new products, services, and operational improvements is crucial for keeping franchisees updated.
Customised training materials: Providing access to online learning platforms, manuals, and in-person workshops tailored to different roles within the franchise can enhance the learning experience.

For a deeper understanding of these critical franchisor duties, this informative resource provides essential insights into the breadth of support expected from a franchisor, underscoring the significance of comprehensive training programs.

2. Offering Marketing and Advertising Support

Effective marketing strategies are vital for attracting customers and building brand loyalty. Franchisors create national and regional advertising campaigns that benefit the entire network.

Brand guidelines: Ensure franchisees adhere to and maintain consistency across all locations.
Local marketing initiatives: Support for local marketing efforts, including social media, local press, and community events, can help franchisees maximize their regional presence.

3. Ensuring Operational Support

Operational support is a cornerstone of franchisors' franchise support services. This involves offering guidance on daily operations, technology use, customer service, and quality control.

Supply chain management: Assisting franchisees with inventory management and supplier negotiations can significantly reduce costs and improve profitability.
Technology and systems: Implementing efficient point-of-sale (POS) systems and customer relationship management (CRM) tools can enhance operational efficiency and customer satisfaction.

4. Facilitating Network Development and Site Selection

Selecting a suitable location is critical for individuals buying a franchise or looking to start a franchise. Franchisors play a crucial role in site selection, market analysis, and lease negotiations to ensure that the chosen location offers the best possible chance for success.

Demographic and market analysis: Detailed insights into local demographics, competition, and market trends can help inform decisions.
Design and layout support: Guiding franchisees in the design and layout of their outlets to optimize space and create an inviting atmosphere for customers.

5. Monitoring Compliance and Quality Control

One of the primary responsibilities of a successful franchisor is to ensure that all franchisees comply with the brand's operational standards and legal requirements. This is essential for maintaining the integrity and reputation of the brand.

Regular audits and assessments: Conduct periodic reviews of franchise operations to ensure adherence to brand standards and regulatory compliance.
Feedback and corrective actions: Providing constructive feedback and necessary support to franchisees to address any areas of non-compliance or operational deficiencies.

6. Innovating Products and Services

Innovation is key to staying ahead in a competitive market. Franchisors' goals should include the continuous development of new products, services, and business models that meet changing consumer demands and market trends.

Research and development: Investing in R&D to innovate and enhance the brand's offerings.
Market testing and roll-out: Pilot testing new products or services in selected locations before a system-wide launch ensures they meet customer expectations and are operationally feasible.

Understanding the advantages of franchises and the strategic importance of innovation can further be explored through insights on why becoming a franchisor presents a smart move for business expansion and sustainability, as detailed here.

7. Facilitating Financing Options

The initial investment and ongoing operational costs can be significant barriers for potential franchisees. It's part of the obligations of a franchisor to assist franchisees in securing financing through partnerships with financial institutions or offering financing options directly.

Financial guidance: Providing financial planning support and advice to help franchisees manage their finances effectively.
Access to preferred lenders: Establishing relationships with banks and financial institutions that understand the franchise model can streamline the loan application process for franchisees.

8. Building a Supportive Franchisee Network

A strong, supportive network of franchisees can significantly contribute to franchise systems' overall advantages. Creating platforms for franchisees to share insights, challenges, and best practices can lead to a more cohesive and successful franchise network.

Franchisee associations: Encourage the formation of franchisee associations or advisory councils to facilitate dialogue and feedback between franchisors and franchisees.
Peer mentoring and networking events: Organising regular meetings, conferences, or webinars where franchisees can connect, learn from each other, and build lasting relationships.

9. Ensuring Legal and Regulatory Compliance

Staying abreast of legal and regulatory changes is crucial for franchisors and franchisees. Franchisors must ensure that their franchise agreements, operations, and business practices comply with all relevant laws and regulations to protect the franchisor and the franchisee.

Franchise disclosure documents: Keeping franchise disclosure documents (FDDs) current and ensuring franchisees understand their legal rights and obligations.
Legal support and resources: Providing access to legal resources and support for navigating franchise-specific legal issues.

10. Promoting Sustainable Business Practices

Incorporating sustainable practices and social responsibility into the franchise development process benefits the environment and community and enhances the brand's reputation and appeal to consumers.

Sustainability initiatives: Encouraging franchisees to adopt energy-efficient technologies, reduce waste, and engage in community service activities.
Social responsibility programs: Implementing programs that contribute to local communities, such as charity events or sponsorships, can strengthen the brand's social footprint.

11. Implementing Effective Communication Channels

Effective communication is the backbone of any successful franchisor-franchisee relationship. Franchisors must establish and maintain open lines of communication with their franchisees to facilitate the free flow of information, feedback, and support.

Dedicated support teams: Set up dedicated support teams or account managers who can promptly address franchisees' concerns, queries, and operational challenges.
Regular updates and newsletters: Providing regular updates through newsletters, emails, or an intranet portal to keep franchisees informed about the latest developments, changes in regulations, or any new company policies.

12. Cultivating Brand Reputation and Customer Loyalty

A franchisor's responsibility extends beyond the operational aspects to cultivating and maintaining a positive brand reputation and customer loyalty. This involves implementing strategies that attract and retain customers through superior service and brand values.

Customer experience programs: Developing and implementing programs to enhance customer satisfaction and loyalty. These include training on customer service excellence, feedback mechanisms, and loyalty reward programs.
Reputation management: Monitoring and managing the brand's online presence and reputation, including reviews and social media engagement, to maintain a positive brand image. Offering tools and training to franchisees on best practices for online engagement and reputation management.

13. Providing Crisis Management Support and Guidance

In today's unpredictable business environment, franchisors must prepare their franchisees to handle crises effectively. This entails reactive measures and proactive planning and training to mitigate potential risks.

Crisis management planning: Assisting franchisees in developing and implementing crisis management plans, including training on responding to various scenarios that could impact the business.
Support during emergencies: Offering direct support and guidance to franchisees during emergencies or crises, including financial support options, communication templates, and operational adjustments to navigate challenging times.

14. Establishing Robust Data Privacy and Security Measures

With the increasing reliance on digital technologies, the importance of data privacy and security has never been more pronounced. Franchisors are responsible for implementing and maintaining robust security measures to protect sensitive franchise and customer data against cyber threats.

Data protection protocols: Implementing standardised data protection protocols across the franchise network to safeguard against data breaches.
Cybersecurity training: Offering regular cybersecurity training and resources to franchisees, ensuring they know the best practices for protecting their business and customer information.

15. Promoting Work-Life Balance and Mental Health Support

Acknowledging the challenges of running a franchise, franchisors should promote a culture that supports work-life balance and mental health. This improves the well-being of franchisees and their employees and contributes to a more productive and positive business environment.

Mental health resources: Providing access to mental health resources and support services for franchisees and their staff.
Flexible work arrangements: Franchisees should be encouraged to implement flexible work arrangements to improve work-life balance for themselves and their employees.

Conclusion

The relationship between a franchisor and a franchisee is a partnership that requires commitment, support, and mutual respect. By fulfilling their responsibilities, franchisors can ensure the success and growth of their franchisees, which, in turn, contributes to the overall strength and expansion of the brand. This comprehensive approach to franchising, emphasizing support, innovation, and sustainability, makes the franchise model a compelling option for entrepreneurs across Canada.

By taking on these responsibilities, franchisors contribute to a thriving business environment and set the stage for long-term success in the franchise industry.

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FMS Franchise Canada

FMS is a team of expert franchise consulting professionals based in Canada that provides solutions for franchise development, franchise consultation, and expansion of businesses globally.

10 Common Mistakes to Avoid as a Franchisor

In franchising, the margin for error can be slim. For those contemplating buying a franchise or currently managing one, awareness and avoidance of common franchisor mistakes are crucial to the vitality and growth of their business. Here, we will go over some of the missteps often encountered by franchisors and outline strategies to sidestep these pitfalls. Understanding these common errors is not just about safeguarding investments; it's about ensuring a franchise's long-term success and operational excellence.

1. Inadequate Franchisee Selection Criteria

The initial step in expanding your franchise is selecting the right franchisees. A franchisee's financial stability, industry experience, and shared brand values are critical to the success of your franchise development plan. These criteria are not just boxes to be ticked; they are the pillars that will uphold the business and ensure its sustainability in competitive markets.

Financial stability is not solely about having the capital to start; it's also about the ability to weather the ups and downs of business without compromising the franchise's quality or service. Industry experience goes beyond previous success; it's about understanding the market, customer needs, and operational challenges. Shared brand values mean a franchisee must resonate with the franchise's ethos, becoming a true brand ambassador.

Failing to set stringent selection standards can result in a mismatched partnership, detrimental to the franchisee and your brand. When a franchisee who lacks the necessary background or financial acumen struggles, it affects their outlet and casts a shadow over the brand, leading to potential customer loss and diminished brand trust. A thorough vetting process is the franchisor's first line of defense against these risks, laying the groundwork for a fruitful long-term relationship that benefits both the franchisor and the franchisee.

2. Overlooking the Importance of Comprehensive Vetting

Neglecting thorough background checks and due diligence can severely affect your brand's reputation and financial health. It is vital to understand that every franchisee added to your network reflects on and impacts the entire chain.

The cost of inadequate vetting extends beyond individual franchise failure; it can erode the trust and consistency you've built in your brand. When franchising your business, remember that the franchisees you approve today are your business's ambassadors tomorrow.

For detailed strategies to protect your franchise while expanding, including thorough vetting of potential franchisees, refer to the essential guidance provided here.

3. Neglecting Franchisee Support Systems

Establishing effective franchisee support systems is key to a robust franchise development strategy. Each franchisee's success is contingent upon the training, resources, and ongoing support they receive. This backing concerns initial training sessions and continuous development, resources tailored to individual market needs, and support that adapts as the franchisee's business grows.

Critical Role of Comprehensive Training and Resources

One of the cornerstones of franchisee support is providing an extensive training program. This program equips franchisees with the knowledge and skills to operate their businesses according to the brand's standards.

Beyond training, franchisees should have access to a repository of resources that can assist them in day-to-day operations, marketing efforts, and customer service excellence. Ongoing support, whether through regular check-ins, refresher training, or problem-solving sessions, ensures franchisees remain competent and confident in their roles.

The Downfall of Inadequate Support

One of the biggest franchising mistakes is underestimating the importance of support structures. Insufficient support can make franchisees feel isolated and overwhelmed, leading to operational inconsistencies, reduced service quality, and a tarnished brand image.

When franchisees falter due to a lack of support, it affects their performance and poses a risk to the integrity and reputation of the entire franchise system. Therefore, investing in a solid support system is not optional but critical for franchisors aiming for long-term success and brand loyalty.

4. Overlooking the Importance of Communication in Franchising

Effective communication stands at the heart of a successful franchise development strategy. Clear and consistent channels between franchisors and franchisees convey expectations, provide updates, and facilitate feedback.

The Power of Effective Communication

A well-established communication framework ensures franchisees are always in sync with the franchisor's vision, policy changes, marketing strategies, and operational guidelines. This clarity helps prevent misunderstandings and fosters a collaborative atmosphere conducive to growth and problem-solving.

Consequences of Communication Breakdown

Conversely, one of the common franchisor mistakes is neglecting the importance of robust communication practices. Poor communication can lead to misaligned business objectives, inconsistencies in customer experience across different franchises, and a general disconnection between the franchisor and its network. This breakdown can have a ripple effect, leading to dissatisfaction among franchisees and customers.

5. Inadequate Site Selection and Development Strategies

The site selection and development process is critical to a franchise development plan. Making informed decisions about where to establish new franchise locations can significantly impact the success of those outlets.

Strategizing Site Selection

Choosing the right location involves more than just picking a spot on the map. It requires an analysis of market trends, customer demographics, competition, and local economic factors. The site should align with the brand's target market and be conducive to the franchise's operational model.

Risks of Poor Site Selection

Neglecting the complexities of site selection and development can result in franchises being set up in locations with low visibility, inadequate customer reach, or intense competition. Poor site choices not only hamper the franchisee's chances of success but also can be costly for the franchisor in terms of support resources and brand reputation. Therefore, a strategic approach to site selection is indispensable for the longevity and prosperity of the franchise network.

6. Overlooking Financial Planning

Providing sound financial planning guidance is key for a franchise system to thrive. This includes offering resources and training in budget management, cash flow analysis, and cost control strategies. Sound financial planning ensures that franchisees are equipped to make informed decisions, laying a strong foundation for the health and growth of their business.

Consequences of Neglecting Financial Oversight

One of the biggest franchising mistakes is failing to oversee and assist in the financial management of franchise units. Neglecting this aspect can lead to franchisees making uninformed financial decisions, which can result in business failure, affecting not just the individual franchise but the reputation and stability of the entire franchise system.

7. Inconsistent Marketing and Brand Consistency

Maintaining a consistent brand image while adapting marketing strategies to local market needs is crucial in franchising your business. This balance ensures that the brand's core message remains intact while also catering to the unique characteristics of each location's target market.

Risks of Inconsistent Branding

Inconsistent branding and marketing efforts can dilute the brand's identity and confuse customers. Franchisors need to provide clear marketing guidelines and support to ensure that all franchisees represent the brand consistently while effectively engaging their specific market demographics.

8. Disregarding Legal Compliance

Understanding and adhering to Canadian franchise law and regulations is paramount. Franchisors must ensure that their practices comply with these laws, including fair dealings with franchisees, accurate disclosure, and adherence to contractual obligations.

The Price of Non-Compliance

Ignoring legal compliance can lead to significant repercussions for franchisors, including lawsuits, financial penalties, and damage to the franchise's reputation. Ensuring regulatory adherence protects the franchisor and upholds the integrity and trustworthiness of the franchise.

9. Poor Relationship Management with Franchisees

Establishing and nurturing a positive relationship with franchisees is crucial for a flourishing franchise network. Building a collaborative environment entails open communication, mutual respect, and a shared vision for success. This approach fosters a sense of partnership, where franchisees feel valued and supported, leading to higher motivation and engagement in their business operations.

Consequences of Neglected Relationships

Ignoring the importance of a healthy franchisee-franchisor relationship can lead to a disconnect, dissatisfaction, and even conflict. Neglected relationships often result in decreased morale and reduced cooperation and can escalate to legal disputes. The fallout from such scenarios not only strains individual relationships but can also impact the overall health and reputation of the franchise.

10. Inadequate Performance Monitoring

Implementing effective systems to monitor franchisee performance and maintain quality standards is a key responsibility of a franchisor. These systems help identify areas of improvement, ensure consistency across the franchise, and maintain the brand's reputation. Regular performance reviews and quality checks are essential in upholding high service and product delivery standards.

Risks of Insufficient Monitoring

Inadequate monitoring can lead to inconsistencies in customer experience, a decline in service or product quality, and potential damage to the brand's reputation. Issues arising from lax monitoring and quality control can quickly escalate, affecting not just the individual franchisees but the entire network. Franchisors must have a proactive approach to tracking and managing performance to ensure the franchise's long-term success.

Conclusion

As we conclude our examination of the most common mistakes to avoid as a franchisor, it becomes evident that franchising, while offering a path to business expansion and success, requires meticulous planning, execution, and ongoing management. Each mistake discussed here, from inadequate franchisee selection to neglecting legal compliance, highlights areas where attention and proactive measures are essential.

It is critical to remember that a franchise's strength lies not only in its business model or brand but also in the hands that carry it forward - the franchisees. Thus, establishing strong relationships, clear communication, effective support systems, and consistent quality control form the backbone of a thriving franchise network.

Franchisors who approach their role with strategic foresight, operational excellence, and a commitment to nurturing their franchise network will be well-equipped to navigate the challenges and opportunities of growing a franchise.

Grow Your Franchise with Confidence with FMS Franchise Canada

Are you seeking professional expertise to enhance your franchise's growth? FMS Franchise Canada is your go-to partner. With over 15 years of experience in franchise development, we provide comprehensive support tailored to your brand's unique needs.

Contact FMS Franchise Canada today for strategic solutions that will propel your franchise forward.

FMS Franchise Canada

FMS is a team of expert franchise consulting professionals based in Canada that provides solutions for franchise development, franchise consultation, and expansion of businesses globally.

7 Marketing Strategies to Attract Potential Franchisees

The franchising landscape is brimming with opportunities. However, the key to unlocking its potential lies in strategic and targeted marketing. By understanding and appealing directly to potential franchisees, businesses can expand their reach, strengthen their brand, and ensure long-term success. But how does one effectively attract the right partners? Let’s delve into some tailored strategies.

1. Understanding Your Target Audience

Every franchisor dreams of the ideal franchisee: one with the right qualifications, ample financial capability, and a set of values that aligns with the brand. It's crucial to dig deep and understand this profile. What drives them? What are their apprehensions about investing in a franchise? By researching and comprehending their specific needs and preferences, businesses can fine-tune their marketing messages to resonate effectively. This deep understanding serves as the foundation for all subsequent marketing strategies aimed at attracting potential franchisees.

2. Digital Marketing Approaches

In today's digital age, having a strong online presence is non-negotiable.

SEO Mastery: It’s not just about being online; it's about being visible. Leveraging SEO ensures that content tailored for potential franchisees reaches the top of search results. Well-optimized articles or blog posts that answer the common questions on "how to franchise" or explore "franchise advantages" can be invaluable.

Social Media Engagement: Platforms like LinkedIn, Facebook, and Instagram offer an avenue to showcase the brand, its success stories, and the benefits of joining as a franchisee. Regular posts, stories, or even live sessions can engage potential partners, making them feel aligned with the brand's vision and values.

Online Advertising and Retargeting: While organic reach is vital, paid campaigns can target specific demographics, ensuring that your franchise opportunities are displayed right in front of those considering entering the franchising world. Retargeting ads further ensure that those who've shown interest once are reminded of the opportunity, increasing chances of conversion.

With these strategies in play, businesses can create a robust digital footprint, drawing potential franchisees into their fold with precision and effectiveness.

3. Engaging Content Creation

In the world of marketing, content is king. Creating content that resonates with potential franchisees can not only inform but also inspire them to take action.

Webinars and Workshops: Hosting informational webinars can demystify the franchising process for many. Topics can range from “how to franchise a business” to exploring the unique advantages of your franchise model. Such interactive platforms allow for real-time Q&A, addressing concerns immediately and building trust.

Testimonials and Case Studies: There’s power in storytelling. Sharing success stories of current franchisees, perhaps through video interviews or written articles, can provide tangible evidence of your brand's promise. It’s a testament to the support, training, and benefits that come with being part of your franchise system.

4. Networking and Events

Building relationships in the franchising community can be a significant catalyst for growth.

Franchise Expos and Conferences: Participating as an exhibitor in franchise expos provides a platform to showcase your brand to a pool of interested parties actively seeking opportunities. It also allows for face-to-face interaction, helping in building genuine connections.

Informational Sessions: Organizing sessions where potential franchisees can get a firsthand experience of what it's like to be a part of your franchise can be very impactful. Such sessions can be coupled with tours of a successful franchise location or meeting with some of your franchise consultants, providing a holistic view of the franchise journey with your brand.

5. Direct Outreach Methods

Sometimes, taking the first step can lead to fruitful partnerships.

Email Marketing Campaigns: Tailored email campaigns targeting potential franchisees can provide them with curated information, updates, and opportunities to connect. These emails can highlight franchise advantages, success stories, and upcoming events.

Cold Calling Techniques and Strategies: While cold calling might seem old-fashioned, it's about the approach. With a well-researched list and a genuine approach, reaching out directly can spark interest, especially if you're offering something unique or have updates about your franchise opportunities.

Harnessing the power of engaging content, networking events, and direct outreach can significantly enhance the visibility and appeal of your franchise offering, drawing in potential franchisees who align with your brand's vision and values.

6. Leveraging Franchise Brokers and Consultants

Franchise brokers and consultants can be invaluable assets in your pursuit of attracting the right partners.

Working with Franchise Consultants: Franchise consultants possess a wealth of knowledge and an extensive network of potential franchisees. They can provide insights, from the challenges of "how to franchise a business" to the nuances of different markets, helping you tailor your approach.

Collaborative Campaigns: Brokers often have a pulse on what potential franchisees are seeking. Collaborating with them can lead to potent marketing campaigns, targeting the right audience with precision.

7. Navigating Legalities and Compliance

A solid legal foundation can instill confidence in potential franchisees.

Understanding Franchising Laws: Being well-versed in local franchising laws and ensuring that your franchise model is compliant can be a significant selling point. This not only protects your brand but also demonstrates professionalism to potential partners.

Contracts and Agreements: Clear and comprehensive agreements, detailing the rights, obligations, support systems, and financial structures, can set the tone for transparent and trustworthy franchisor-franchisee relationships.

Eager to elevate your franchise journey?

Think of FMS Franchise Canada as your one-stop shop. We've steered numerous franchises towards success, connecting them with ideal partners and magnifying their growth. With us by your side, every step towards franchising success becomes clearer and more achievable.

Choose FMS Franchise Canada and embark on a path of strategic growth, innovation, and proven success. Connect with us, and let's collaboratively shape a successful franchise journey for your business.

FMS Franchise Canada

FMS is a team of expert franchise consulting professionals based in Canada that provides solutions for franchise development, franchise consultation, and expansion of businesses globally.

HOW DO I BECOME A FRANCHISOR?

You have a great idea and your company is growing so fast you can hardly keep up, clearly, the market wants more of what you have to offer. There aren’t enough hours in the day to meet the demand and if you had more locations, you could sell a lot more of your product or service. You need and want to grow your business, but the difficulties related to raising capital, hiring large amounts of staff and operating a large entirely corporate-owned chain is cumbersome. It could be time to franchise your business, but how do you become a franchisor?

You will need help. Like any new endeavor, the process of becoming a franchisor has potential risks associated and the business model is unique when compared to other growth models. Good franchise systems have excellent models in place to benefit all parties involved and that doesn’t happen by accident.

Franchise consultants exist who can facilitate your becoming a franchisor.

To become a franchisor, there is a significant amount of planning, strategy and simply put, paperwork to do. Experienced franchise consultants can help with this franchise development process every step of the way. The key to choosing the right franchise consultant can be broken into three categories to help franchise your business:

First, does the franchise consultant have a team behind them to support all aspects of the development process? Make sure the resources and experience exist to support the franchise development process from beginning to end.
Second, do the team of franchise consultants have experience working with start-up franchisors who are new to the market and are working on selling their first 5 units. This is a unique part of franchise development and requires special processes.
Third, are the franchise consultants compensated on performance and results of the franchise roll out? You will want people who are vested in your success and have a reason to make sure that the franchise model is effective.

Franchise consultants will help evaluate the franchisability of your business which must be repeatable and have opportunity for scale. They will identify your competition and research where there is opportunity for competitive advantages in the market. The first step is the franchise Strategic Plan where franchise consultants would help you determine the numbers and structure of the new franchise model.

As a new franchisor, you will need guidance in determining what a realistic franchise fee should be for your business; what royalty could be expected as a new franchisor; what kind of territory should be identified; what kind of training you will provide; what the franchisee will need to run the business; what the initial investment will be for the new franchisee along with other key aspects.

As franchisor, you will need to create a new and separate entity that will be the franchise business. After the initial planning stage, there is the Franchise Disclosure Document, also known as the FDD. That is the legal document that is presented to prospective buyers of the franchise in the pre-sale disclosure. Some states require that the FDD be registered before you can sell your franchise concept in that state.

You should retain a good franchise attorney who can guide you through this process and develop the FDD with proficiency. This document has 2 main parts, the first part discloses what you as franchisor agree to do for franchisees in plain English. The initial investment is stated again along with franchise fees, royalties, advertising requirements, a P&L, territory, duration of the agreement, trademarks and the training program.

The second half is the franchise agreement which outlines the agreement between you the franchisor and your new franchisee. After the FDD, your franchise consultant should help the new franchisor create an Operations Manual for the business. The manual outlines the steps a new franchisee will follow to have a business continue to be as successful as what you, the franchisor, have created.

Other franchise consulting services provided to ensure a successful new franchise include a marketing plan and some creative artwork for the logo, a good franchise website and effective advertising.

After the paperwork is done, your franchise consultant should carry the staff and the procedures to guide you in the right direction to start selling the concept for you, the new franchisor.

Trisha Conner
Franchise Consultant
Franchise Marketing Systems
[email protected]

FMS Franchise Canada

FMS is a team of expert franchise consulting professionals based in Canada that provides solutions for franchise development, franchise consultation, and expansion of businesses globally.

How to Create a Franchise Evaluation Form

The franchise evaluation form is a critical part of the franchise sales process which is not only necessary as part of the sales process, but is critical in order to make good business decisions as to who should be allowed into your franchise model. So what makes for a good franchise evaluation form and how do you build your franchise evaluation model so that you are screening out the poor performing franchises and accepting only the top potential franchise candidates? To Franchise a business successfully, you need great franchisees. It is much easier to weed out franchise candidates up front before they get into your system then it is after they’ve bought and you realize they don’t have the skill set or the money to do the business.

1. Start with your franchise buyer profile and understand clearly who you want to target and what qualifications that buyer should bring in order to qualify for your franchise opportunity. Know the characteristics, traits and capital needed for them to be able to open and start your franchise.
2. Develop a franchise sales process that takes into account these requirements for franchise buyers. The advertisements, messaging and overall franchise presentation should echoes the target buyer profile and incorporates as many qualifying factors into your messaging as possible.
3. The franchise sales personnel should know and understand the franchise evaluation form and incorporate this tool into their sales process. It should be used as a qualifier not only to determine whether the buyer has the capability to open the business, but also whether they are engaged enough in the sales process to fill out the form and return this to the franchisor. We generally recommend that there should be a hard stopping point in the sales process where the franchisee is not permitted to move further into the franchise sales stages until they complete and return the form.
4. Forms can be electronically sent and many times can be incorporated into your website to achieve the same results as you would if sending via a PDF.
Examples of Franchise Evaluation Forms in both formats, the PDF download/print/fill out form (http://franchisinginformation.dunkinbrands.com/apex/DUNKIN_Opportunity_Interest?Cntry=&Brand=)
5. Franchise Evaluation Forms should ask the obvious question of how much money a particular buyer has to be able to invest in the franchise business, but should also take the questions deeper. As a franchisor, you should want to know the candidate’s background, experience, work history, where their capital is (retirement, stocks, bonds, home, etc). You want to have some aspects to the application that are open ended and allow for the buyer to tell you about themselves and their reasoning for being interested in your franchise brand.
6. Franchise Non-Disclosure Agreements are typically included as part of the Franchise Evaluation Form as well and can be incorporated into the franchise sales process. You should ask your franchise attorney how this is permitted to fit into your sales model dependent on your state or market and what franchise regulations may exist.
7. Keep your evaluation forms on file. These can be used for reference for both good and bad franchisees to help determine more accurately who you should and who you should not be focusing your franchise sales efforts on. Also, in cases of franchise litigation or lawsuits, you will be able to use these forms as evidence that you qualified a franchisee before awarding the franchise to them.

All together, the franchise evaluation form needs to be an important part of your sales process and overall recruitment strategy. Be critical of the candidates who are coming into your system, they are being provided an opportunity to grow and build a business using your system and intellectual property. It is their job to convince you that they have what it takes to add value to the company and the family of franchisees you are building.

For more information on how to develop your franchise sales processes or how to develop great franchise evaluation forms, contact us:
[email protected]

FMS Franchise Canada

FMS is a team of expert franchise consulting professionals based in Canada that provides solutions for franchise development, franchise consultation, and expansion of businesses globally.