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Every Franchisor Should Have One

Published on January 04, 2022

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Whether a franchise brand is a startup, growing or established, there is one truism I’ve learned over the years, the franchisor better know what kind of candidate they should recruit and sign.  This is especially true for new franchisors. If a startup franchisor doesn’t know the type of franchisee it should look for, it shouldn’t be franchising. Regardless of system size, once a franchisor identifies their target markets, it needs to have an ideal franchisee profile that identifies the type of individuals to recruit as potential franchisees.

A franchisee profile identifies the attributes and qualifications that a franchisor’s ideal franchisee candidate should possess. In the past, it was common for many franchisors to accept franchise candidates based primarily upon their financial qualifications without considering other traits. During recent times more franchisors are qualifying franchise candidates by using comprehensive techniques including a franchisee profile and pre-qualification testing. This process will improve the quality of their franchisees and reduce the costs to recruit the right candidates by targeting types of prospects. Using Key Performance Indicators (KPI’s) to identify top performing franchisees and shared attributes will enhance the reliability of a franchisee profile.

A franchisee profile should include several categories of information and its content can vary, depending on the type of franchise business. The profile should specify a candidate’s minimum financial qualifications, particularly their net worth and available liquid capital. It should include a candidate’s previous business ownership and accomplishments to confirm that the candidate has the business experience and skills that would enable them to better operate the franchise. A lack of leadership experience is important for franchise concepts that require numerous employees and when operating a multi-unit franchise. A lack of this experience could hamper a franchisees future success. After a franchise application is submitted and the candidate interviewed the information can be compared to the franchisee profile to identify their compatibility.

A factor that should be included as part of the franchisee profile is the personality characteristics of the prospect. For example, an extroverted personality may be important for certain franchise business concepts that depend upon direct sales and business to business sales activities, such as real estate and business services franchises. Finally, the timetable for a franchisee to open a franchise is important since it enables a franchisor to set priorities when identifying and evaluating potential candidates. As an additional qualifier some franchisors establish franchise opening timelines which identifies when candidates desire to open their franchise. For example, a hotel franchisor may allow a franchise candidate a year for opening due to the complexity of the project.

Franchisors should update their franchisee profile to ensure its accuracy and use. An update allows franchisors to confirm whether a franchise candidate exhibits the necessary characteristics to launch and operate a successful franchise business. These updates should reflect the attributes of existing franchisees and how they performed. This can improve the predictability of the franchisee profile on future franchisee performance.


About the Author: Ed Teixeira
Ed Teixeira is a recognized franchise expert with over 40 years’ experience in the franchise industry. He has served as a corporate executive for franchise firms in the retail, manufacturing, healthcare and technology industries and was a franchisee of a multi-million-dollar home healthcare franchise. Ed and Richard Chan are the authors of a new textbook, Franchising Strategies: The Entrepreneurs Guide to Success, to be published on July 1st by Routledge on July 1st. He has participated in the CEO Magazine Roundtable Meetings with business leaders from around the country and has spoken at a number of venues including the International Franchise Expo and Chinese Franchise Association in Shanghai, China. Over the course of his career, Ed has been involved with over 1,000 franchise locations and launched franchise concepts from existing business models. Ed can be contacted at [email protected].

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