Franchisors Need To Assist New Franchisees To Be Prepared

Franchisors should support their new franchisees, to confirm they have their team identified and in place before the franchise is ready to open. In addition, the franchisor should know how the franchisee intends to operate their franchise.

Before investing in their new franchise, the future franchisee should know the key responsibilities and structure of their franchise staff. As it gets closer to signing the franchise agreement, key questions need to be answered and plans put in place. One area that requires thought and planning is who the franchisee will rely upon to help manage the new franchise. I’ve seen instances where a new franchisee had planned on having a particular person work in the franchise and then the  person had a last second change of heart. I’ve also witnessed firsthand, instances where a franchisee hired new employees who literally stood around and were on the payroll before the franchise was up and running.

Screening, hiring and deploying the right people to help the new franchisee operate their franchise is a key requirement for a successful franchise.

Here are some suggestions for franchisees regarding their key team:

1.   Identify the functions and responsibilities that need to be performed and who will do them. Before determining who, you’ll need on your team, you will need to know what needs to be done. The franchisor should provide employee profiles, job descriptions and recruiting tips in the operations manual. If these aren’t available, the prospective franchisee should question the quality of franchisor support and resources. Be sure to identify the hiring sequence. What position is most crucial to starting up the franchise? Will you need one highly qualified person or will two people at approximately the same cost meet your needs?

2.   After the responsibilities and positions have been identified plan how you’ll recruit. Do you have anyone in mind? Will you need to advertise the positions? Is a spouse of the family member working in the franchise? Do you plan on networking to find someone?

3.   Identify the timing of your hires. Don’t bring staff on too early and pay unnecessary payroll dollars. Unless you anticipate the franchise getting off to a smashing start you want to avoid having excess staff at the beginning. Conversely, if you delay bringing the right staff on board the franchise operation could be more difficult to manage.

4.   Determine how the key staff will be compensated. Consider using bonuses and incentives that are performance based. This approach could help preserve valuable working capital during the start-up phase of the franchise. It may help attract motivated individuals who have the self-confidence to perform well. Avoid granting equity in the franchise except to an investor.

5.   Have a plan for replacing employees who leave the franchise. The smaller the franchise, the more important employees will be to the operation of the franchise and the more difficult it can be to replace them. This is why it’s important to carefully plan your staffing needs and evaluate employee qualifications.

Individuals considering a franchise need to plan and identify the key members of their staff. Before a franchisor grants a franchise, they should question the prospective franchisee about their staffing plans. Their response could provide insight as to their qualifications to be a successful franchisee.

About the Author: Ed Teixeira
Ed Teixeira is V.P. Franchise Development for Franchise Grade. He is a recognized franchise expert with 40 years’ experience in the franchise industry. Ed 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, published by Taylor Francis Routledge. He has participated in the CEO Magazine Roundtable Meetings with business leaders from around the country and has spoken at several venues in the United States and other countries 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].