How to Find the Right Franchise Recruiting Professional

The one thing that’s rarely in short supply in franchising is people who claim to be great salespeople. The one thing that is always in short supply, however, is people who actually are great salespeople. If you’re going to recruit a salesperson from outside your organization, here are a few tips for sources to consider:

• An executive search firm specializing in franchising: There are several really good search firms supporting franchising. You can find a partial list by looking at members of the IFA’s Supplier Forum. Two firms with long histories in finding franchise talent are Capodice & Associates and Franchise Search.
• Your franchise lawyer and consultant: Besides often knowing personally the best professional franchise salespeople and who might be available at any time, your franchise lawyers and consultants have access to a powerful information source: their professional network. Ask them.
• Other franchisors: Franchising may be a major part of the economy, but it’s a relatively small network of companies. It’s also a community that shares information. Calling other franchisors about candidates they might have interviewed but did not select for various reasons can be a very good source of information on who is looking for a new position.

Although executive search firms can add significant value — because they have interviewed and conducted background checks on candidates they are representing — it comes at a cost. The professional network in franchising is very strong, and although many franchisers use executive search firms all the time, you can always begin looking for any candidate by networking with others in franchising, because they general know the best people for the job, and of course you can avoid the cost of the executive search firm.

Growth should be strategic. If you are going to succeed, you need to determine where and when you should open in new markets. You need to determine which markets will be your primary targets, which will be your secondary markets, and which you are unable to grow in because you won’t be able to affordably provide support to your franchisees.

Expanding without a plan is potentially dangerous because supporting distant, isolated locations is expensive and will absorb precious human and financial resources in your early days. If you stretch yourself too thin, your entire system may suffer for lack of attention to quality standards.

When you develop an expansion plan for emerging franchise clients, you should factor in a host of considerations. Begin by understanding the initial and continuing support requirements of franchisees and then determine the franchisor’s financial and human capabilities. Although you will need to explore the company’s contractual obligations to franchisees, which must be met, what is essential is that the company’s initial franchisees are successful.

The goal for a franchisor must be for its franchisees to succeed. This is especially true for a franchisor’s initial franchisees. Keep in mind that your initial franchisees make their investment decision substantially based on trust in their future profitability and your capabilities to support them. Future franchisees will have an advantage in that they will be able to talk to those franchisees about how well their businesses are doing and your capabilities and level of support.

Validation by existing franchisees to prospective franchisees will be the most important element of determining how well you will be able to grow and expand in the future.

In addition, you should examine the company’s capabilities in these areas:

• Financial ability to market for franchisees
• Supply chain management
• Performance of company and franchisee-owned locations
• Efficient enforcement of brand standards
• Franchisor’s goals, culture and exit strategy
• Franchisor’s existing internal assets — both human and systemic — available to support franchisees

An unfocused market development strategy (one in which the markets selected for development are determined by where the prospective franchisees’ phone calls or emails come from) will cause the company to be reactive rather than proactive, at all levels. For example, without a market expansion plan, you may fail to register your franchise in markets where you should be targeting or may incur unnecessary expenses by registering and advertising in states where you should not be expanding yet.

Your expansion decisions need to be based on measurable criteria. What expansion methods you target for expansion — single-unit or multi-unit franchisees or even further company-owned development, in addition to the critical mass requirements in different types of markets — should be understood.

Understanding the distance customers will travel to your franchisee’s location and the population (people or businesses) needed to support each franchisee’s business are needed to decide on how many locations are required to achieve critical mass for your brand. Understanding critical mass requirements, among other things, enables a franchisor to better manage its field service and distribution costs per unit and provides the most effective way to capitalize on local marketing possibilities.

The goal isn’t merely to enter new markets, but also to enter them successfully. Distinguish your core market opportunities (in major and secondary urban areas) from tertiary market opportunities (in all other areas) so that you can profitably support your franchisees through effective field support, advertising, and other necessities that will be critical to your success as a franchisor. Knowing your critical-mass requirements enables you to better plan your growth.

Having company-owned locations spread out over a host of markets can drain a company’s resources. If you have company-owned operations that are spread out and causing you strain, you should evaluate whether you should sell those businesses to franchisees. You can then take the proceeds from the sale of those stores to growing company-owned units elsewhere, paying down some of your debt or marketing and supporting new franchises. Following this approach is part of what is called a refranchising or retrofranchising approach.