Franchisee recruitment is an issue in Australia and globally. A
recent Canadian1 study polled 400 franchisees to uncover the
motivations surrounding a decision to invest in a franchise. The
results provide some insight into the strategies franchisors may
use to maximise the value of their franchise, as well as its
attractiveness to potential franchisees.
The results of the survey show that franchisees are generally
not 'shopping around' for a franchise. Rather, close to
half only considered one franchise opportunity. The initial appeal
of a franchise therefore carries a lot of weight. In this regard,
franchisees look at:
Available franchising opportunities
Known franchise name
Well known brand
Unique concept with low competition
Speaking to other franchisees
The survey reveals that the majority of franchisees are aged 35
to 44 years old. In addition, 56% of those surveyed expect to own
the franchise for at least five years, although a significant
proportion see it as a final step before retirement. So it is
serious long-term decision, and it involves a commitment of a lot
Franchisors seeking to appeal to franchisors should focus upon
the durability of their business model, and emphasise fair renewal
policies, open communication with franchisees and ongoing support.
The survey indicates that potential franchisees are looking for a
business which will grow with them and provide the continuous
training needed to build their franchise.
Appealing to the entrepreneur within
Approximately half of franchisees indicated they had considered
opening their own business, so franchisors need to focus on the
relative strengths of their franchise over an independent business.
This includes highlighting the lower risk of the franchise compared
to starting a business, as well as the ease of running a franchise.
Potential franchisees also factored into their consideration the
training and support available when choosing a franchise. Of
course, low fees and profitability potential were influential in
the decision making process.
The 'entrepreneurial' franchisees were seen to go
through a more exhaustive process in choosing a franchise. Speaking
to current franchisees was the main source of information for
evaluating a franchise. Maintaining morale and giving current
franchisees good reason to remain loyal is therefore one of the
most credible selling points of your franchise.
The survey confirmed that business development forms an
important part of franchising, with franchisees seeking a strong
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
We discuss whether certain clauses commonly found in ordinary commercial contracts could be considered to be penalties.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).