Franchise Development, that comprises recruiting, selecting, vetting, and qualifying franchisee prospects, is likely the most essential task for franchisors. Failure to cultivate successful franchisees can result in a decline in franchisee financial success and a shortage in franchisor royalty revenues. Effective franchise development allows franchisors to finance and expand their franchise organization, increase franchise brand recognition, and bring value to both the franchise brand and franchisees. Whether a franchisor employs in-house development personnel, franchise brokers, or a combination of both, the procedure is essentially identical.
Target territories for franchises
The first step in making a franchise is to figure out which franchise territories would have the most demand for the franchise’s products or services. Targeting franchise territories is a process that is not based on guesswork but on careful research. Key factors should show the franchisee how to make money by figuring out the demographics of the territory and how many potential franchise customers live there.
Make the profile of the franchisee
Following the identification of franchisee regions, the franchisor must develop an ideal franchisee profile to assist in finding the most qualified persons to be recruited as franchisees. A franchisee profile is a list of characteristics and qualities that the ideal franchisee candidate should have. Previously, franchise candidates were frequently judged only on the basis of their financial qualifications, with little regard for other aspects.
Applicant for Franchise Recruitment
The process through which franchisors use different marketing and advertising strategies to entice qualified individuals to seek out and apply to be franchise candidates is referred to as recruiting franchise candidates. Franchise lead generation is another term for it. The franchisee profile will be crucial in deciding how and where to attract franchise prospects.
Franchisee Lead Processing and Qualification
Following the generation of franchise leads, the next phase in the franchise development process is the processing and qualification of franchisee leads and queries from prospective franchise applicants. This stage relates to franchisors’ processes and procedures for identifying the most capable and qualified franchisees for their franchise system. After receiving a completed franchise application, the franchisor will analyze the application to assess the persons’ franchise eligibility. The procedure by which franchisors completely approve an individual’s credentials to be given a franchise is known as qualifying the franchise prospect.
Qualifying franchise applicants is a key part of the franchise development process since nothing is more disruptive and harder to deal with for a franchisor than a poorly qualified franchisee who cannot effectively administer their franchise.
Getting to Know the Franchise Candidate
Interacting franchise candidate is the process through which a member of the franchise development team may communicate significant components of the franchise opportunity to the franchise candidate and gather more information about the candidates. Prospective franchisees will be contacted by the V.P. Franchise Development or another staff member who can lead them through the franchising process once they have been qualified and have had the opportunity to examine the FDD. The individual that contacts the prospect in bigger franchise businesses is frequently a franchise development or salesperson. This will be an opportunity to answer any questions the applicant may have after reading the FDD for the first time.
The engagement process is an important aspect of franchise development because it allows the franchisor representative to learn about any issues an applicant may have about the franchise. This can also reveal fresh information about a candidate’s qualifications that were not apparent from the franchise application. A particular franchise staff must be assigned to deal with a franchise candidate. This might improve communication between the franchisor and franchisees and avoid a candidate from obtaining conflicting replies. Finally, this arrangement has the potential to foster a positive relationship between the franchisor representative and the franchise candidate.
The Franchise Exploration Day
Discovery Day, the meeting between the franchise candidate and the franchisor at corporate headquarters, is the sixth phase in the franchise development process. Discovery Day may be the franchise candidate’s first face-to-face interaction with franchisor management. It is critical because franchisor employees may meet with franchise candidates, assess their qualifications, and make an educated judgment about whether the individual should become a franchisee. This is also the franchisee’s last chance to check if the candidate is qualified. As a result, it’s no surprise that every franchisor asks prospective franchisees to visit their corporate offices as the final step before closing the franchise purchase.
The goal of Discovery Day is for franchisor officials to meet with franchise candidates after they have spoken with franchisees, examined the FDD, and gotten knowledge of the franchise program. It is also a time for the franchisee applicant to meet franchisor management, study the franchisor’s corporate culture, get answers to any outstanding queries, and negotiate any outstanding franchise agreement matters.
Complete the Franchise Agreement
The last thing to do to finish the franchise deal is to put together the franchise paperwork and set a date for the deal to close. Before the closure, the franchisor should thoroughly study all of the documentation. This is done to avoid errors such as omitting ancillary agreements such as personal guarantees, non-compete agreements, and non-disclosure agreements.