Building a great franchise program is difficult, and getting to be a part of one is no picnic either. To get some answers on how it’s done properly, we got Fifo’s own Australia franchise recruitment manager, Andrew Roberts, to give us his expert 20+ year take on what it takes to be a successful franchisee.
Quick takeaways if you’re in a hurry:
- A great franchisee needs to possess the general abilities required to run a business.
- Successful franchisees can work within a larger structure and understands how to work as a part of a team, both for their own benefit, and for the franchisor’s.
- Great franchises aren’t all the same. Fifo Capital has over 70 franchisees in New Zealand and Australia, as well as a variety of options for interested franchise investors and partners who are looking for different ways to join the program.
Read on: What makes a successful franchisee
[Estimated read time: 7 minutes]
Fifo Capital operates a successful franchise model with over 70 franchisees in two countries. Andrew, who joined Fifo Capital to help manage its rapid franchisee growth, provides some key insights into what qualities he looks for in a prospective Fifo Capital franchisee.
A franchisee is different than an entrepreneur. They’re both business owners, but an entrepreneur has total freedom and the total lack of guidance that comes with it, while a franchisee works within a structure as part of a large cooperative enterprise. These differences might seem minor to a layperson, but they play a large role in determining what kind of person a franchisor needs to find to ensure the success of their program. Because of this, Fifo assesses two major qualities when looking at new potential franchisees.
The candidate’s ability to run a business
The first and most obvious qualification every franchisee needs is the necessary business acumen to successfully operate a business. Franchisees most especially need to exhibit a variety of soft skills to achieve long term success:
The franchisor needs to know that the franchisee can be trusted to faithfully represent the brand. Because of that they need to display a high level of integrity about how they deal with clients; they need to be honest, and consistently deliver on their promises. Integrity is ultimately what builds the strong customer relationships that underpin any franchise’s long term success.
Building a business is not easy. If it was, everyone would do it, and no one would choose regular employment.
A majority of businesses all over the world fail within their first 12-months. That’s often because owners have to learn as they go, and they have no support structure. They have to work overtime just to keep their operations running, and often don’t have the determination to burn the midnight oil to develop the additional skills they need. When the going gets tough a lot of people give up, but the reality is that running a business, whilst ultimately rewarding, is tough. To be successful, franchisees need the perseverance and resilience to push and innovate their way through tough times.
Leadership and charisma
Successful franchisees have to be good leaders who understand how to motivate and bring out the best in their employees. A business is only ever as good as its workers, and that means knowing how to lead and inspire. Further, this applies to being able to motivate and excite potential customers to do business. Ultimately, this is what gives a business its character, and what makes it possible for both employees and customers to relate to the brand as an entity.
The candidate’s ability to work within a franchise structure
Unlike a solo entrepreneur, a franchisee absolutely has to be a team player with a good attitude. Competition-minded power players—often seasoned entrepreneurs—who don’t accept other people’s rules or instructions can run into serious difficulties with this. Not every capable business person is cut out to be a franchisee, which is why franchisors need to assess whether a candidate will be able to work well within the franchise structure.
Being a team player
Most franchise systems aren’t designed to be overly restrictive, but obviously every franchisor has a structure that already works. Franchisees need to be able to understand and fit into the existing company culture that the program is cultivating. Interfering with that structure can get a franchisee into real trouble. A good team player is someone who understands that the structure is there to give them something to work with, and who helps to build productive networks within that system.
Building on existing systems
Figuring out how to run a business from scratch takes a long time. Joining a franchise is often a way for people who don’t want to spend 3-4 years reinventing the wheel to take a shortcut into a working business model by paying an up-front investment. In doing so they received the tools and expertise needed to run a successful business from day one.
This way, a franchisee can focus their efforts on optimising and developing their business at a more advanced stage. Moreover, they’ll be able to go to other much more experienced franchisees and the franchisor for information, advice, and other support. This access is extraordinary, because in a regular entrepreneurial situation you could obviously never count on advice from someone else in your industry. They’d be in competition with you.
In this way, franchisees can bring their own unique insights and ideas to the table to solve problems for other team members. Collectively those ideas eventually shape the future business process that’ll be provided to all franchisees.
Sharing & networking
A great franchisee isn’t just trying to push their own success, but also gets the big picture. They’ll work together with other franchisees to stay abreast of industry news, congratulate them on their successes, and offer advice and support when appropriate. The camaraderie in a successful franchise program can be really heartwarming, and provides a sense of community that other types of business owners often miss out on. Working together, an integrated team of franchisees can elevate their brand collectively to benefit the entire group.
Buying into a franchise program
Like every good franchise system, Fifo Capital has a robust recruitment and assessment program for potential partners. There are a lot of people involved, and candidates have to go through an 8-10 step process to ensure both parties complete their due diligence.
Different franchise systems have different levels of investment, or buy-in levels. Fifo Capital’s standard franchise is a Partner/Investor model. You buy into the system with a licence fee valid for a number of years with rollover periods. Your fee includes resources and in-field sales training to meet with potential referral partners to help build your network.
Fifo Capital has two other models:
The Hybrid Partner/Investor model
This is suitable for people with the right background in sales or networking, but they don’t have a lot of entry capital. This franchisee then has the opportunity to grow into a full partner/investor model as their own revenue increases.
The Partner Only model
This is an investor-only licence where investors pool their funds in a group. They make their capital available to other partners to use in their purchasing of invoices and receive returns from that. They don’t need to do any active client recruitment, but still go through 2/3rds of the training so they understand the systems and processes.
“Fifo Capital is a great franchise system, and has experienced incredible growth and success. In the past year we’ve grown by more than 35% , and have funded more than $220m to the SME market. In an industry that is worth around $64b, there is huge potential for new franchisees to create very successful businesses with us,” says Andrew.
If you’re interested in joining a successful franchise system, talk to Colin Chisholm at Fifo Capital!