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What do franchisors look for in a potential franchisee

With renewed confidence in the UK’s economy and a “booming” jobs market  there may never have been a better time to start a recruitment business, however it pays to gain an understanding of  what we look from potential franchise business owners…

There are a plethora of exciting business opportunities available to entrepreneurs and business owners available in the current market place. However before we start discussions with any potential  franchisee it is important to understand that the business relationship that you are about to enter works both ways.

I have written a guide on what traits and key skills we as recruitment franchisors are evaluating from potential franchisees looking to come into the business.

We  typically look for three key attributes in preparing our  initial shortlists of potential franchisees:

Firstly, we would expect a thorough understanding in the concept of franchising and how it operates within the UK; Secondly, consideration put towards what you realistically need to take from the business and the total financial commitment required to acquire the rights to our franchise opportunity and finally and of equal importance – the right attitude and transferable skills in becoming a successful franchise owner and operator.

Going into business the franchise route requires thorough knowledge of what franchising involves gained thorough detailed research as clearly a successful candidate will not just become another ‘employee’

1) Your Understanding

In our preliminary meetings we would expect that you would of undertaken market research and scoped all of the opportunities available within our sector. Our opportunity is not for everyone and it could be that you are more suited to a temps agency set up where you have to utilise your management skills, be on call outside of office hours and run the payroll for all your temporary staff

We would expect some understanding and knowledge of the permanent recruitment market place gained from either using the services of a perms recruitment consultancy as a hiring manager yourself or from registering as a candidate looking for career progression.

You will need to demonstrate to any potential franchisor the knowledge of what franchising involves  as any successful franchisee will probably be making the transition from employed to self-employed which in itself can seem daunting.

You will be running your own business but in addition representing the franchised brand so it is important that you follow the systems and procedures put into place by the franchisor  

By the time you are meeting with us you would have researched the whole market and excluded van type offerings and retail opportunities based either on your budget or your skill sets. We would expect you to be looking at similar white collar type business opportunities perhaps in property, recruitment or coaching.

The more research a potential Prima Ardelle Associate’s franchise business owner has carried out will equate to how seriously the candidate enquiry is taken. We don’t expect you to know the ins and outs of the recruitment industry, or even have experience of this sector, as full training and on boarding is given, however you will need to be articulate, focused  and have good people skills. Media like The Franchise Magazine are both informative and succinct in their content enabling you to explore the marketplace before making that big decision

Exhibitions are also good sources of information, along with informative websites as well as the many books on franchising. You will need to ensure you know as much as possible about the subject of franchising to be able to make informed choice as to what would most suit you as a franchisee. 

A clear understanding about the franchise organisation itself will also be expected. Do some research about the type of work load you will be carrying out each day. There is no point in obtaining a retail franchise or coffee shop if you cannot see yourself standing on your feet most of the day. Likewise an outside van type might look great in the summer months but what about the winter period? If the thought of spending a large amount of your working capital on expensive premises is off putting then maybe that estate agency franchise isn’t quite up your street.

It’s a good idea to visit other companies that work in the franchise business sector that you wish to operate to gain first hand working knowledge of the product or service that you will be offering prior to any franchisee interview taking place.

2) Your Financial Commitments

For many prospective franchise business owners a combination of savings  and investment will be required for the initial purchase of the business and clearly this requires some consideration and due diligence.

Writing a list of pros and cons will serve you well in initially ensuring that any franchise business that you are currently evaluating will be able to offer you the earnings and life style choices as well as ongoing job satisfaction. A franchise agreement is usually for a period of 5 years and therefore it is important that you have a good understanding as to what owning and operating a particular franchise will be like on a day to day basis and the working capital required.  

Any franchisor will expect a potential franchisee to have a very clear idea as to whether the business they’re interested in buying will be sufficiently profitable to support them. If you are serious then you will be expected to prepare a business plan as well as projections to make sure you have a thorough understanding as to what is required. Our home based business model is particularly attractive to individual wanting to get an oversight of our business and learn it thoroughly, as it has very low operating costs without the need for premises or staff wage bills before moving up to an office based model.

You will need to have an idea how much profit the business will need to generate so they have a sufficient salary to live on. You may not have had experience of operating profit and loss centres, but if you have experience of running and budgeting for a family home then you probably have a better understanding than you may initially think.

You should write down a list of questions about the operating costs of stock, training, equipment and any regular ongoing costs. At Prima Ardelle Associates we have drilled the cost base down to a level where we are confident that our monthly operating costs are both low and predictable to avoid any unforeseeable costs that may affect the business. Clearly this will not take into account your own personal drawings as this will vary from person to person, we will however guide you on what we feel you can realistically take from the business to allow you to make an informed decision as to where to you feel that this business opportunity is right for you moving forwards.  

Any franchisor will also need to be confident that the potential franchisee has assessed how the venture would be financed.

Whether you intend to finance your business from savings or a finance – we have access to the franchising departments from the major banks, and subject to status, they are normally happy to lend up to 70% of the franchise purchase price or offer 50/50 match funding dependent on if you go for our low cost home based model or our small office type set up. Whichever you choose you will need to have a business bank account set up to receive electronic payments in our industry.  

Prospective franchise business owners will need to have a realistic understanding as to the working capital requirements to operate the franchise on a day-to-day basis – particularly in the early days whilst you are growing. Again dependent upon which  business format you choose this could amount to around 10 to 20% of the overall purchase price of our franchise.

3) Your Attitude Determines Your Altitude

How far you want to go will always be based on your attitude towards following the systems and induction training in any franchise format system.

Successful franchisees are almost always are able to follow the franchisors business format to the letter.  Putting this in simple terms they will have made an investment into their own success and taken the view that if they follow what the franchisor is asking them to do then they are more likely to achieve success earlier on. After all you are presumably going into the franchise business so that you can follow successful the systems and procedures that the franchisor has adopted. 

Your attitude towards learning will effectively determine your altitude. Franchisees that go into their induction and training with an open positive mind set will normally be focussed on implementing their new found knowledge into their business as swiftly as possible.  You must be able to take the advice of the franchisor and obviously follow the franchising manual’s instructions which are all designed to assist you in the operation of your business. 

You will need to adopt a positive mental attitude, be resilient and persistent in you approach which will invariably be split between business development and administration.  We do not require any management experience, but a good background in account management; customer service and sales are all transferable into our business model. If the thought of making lots of out bound telephone calls to job seekers and hiring managers does not appeal to you then this business format is probably not for you. We will look to evaluate your attitude towards these elements of the business as well as your personality during the initial meeting.

Although our business model is easy to operate you must be capable of running your business generally on a day to day basis. We will be looking at your determination and commitment gained from previous work experience when evaluating your ability to own and operate a Prima Ardelle Associates recruitment franchise on a day-to-day basis. 

Willpower, drive, endless energy and a positive outlook are invaluable in customer-facing situations, which franchisees are in on a daily basis.  These characteristics, combined with a hunger for success and personal drive will serve you well. You will need to have a positive outlook towards dealing with business situations as well as taking a proactive stance towards business development combined with good time management skills.

We would recommend in advance of any meeting being held with any prospective franchisors that you prepare thoroughly and can give examples of any achievements gained from roles in previous jobs. These can be examples of good customer service, sales awards or how you ran and managed a successful department.  

Owning and operating a franchise business requires a particular type of individual who has a thorough understanding of what they are looking to achieve from their business as well as the significant financial commitment required to ensure the smooth day to day running of your business. If you are able to demonstrate these essential qualities then you will un-doubtably have a meaningful interview with your chosen franchisor, and the dream of running your own low-risk business with full support and training will be not so far in the future.

As a business owner the rewards are uncapped and earnings levels as well as lifestyle choices are within your control, however like any business, your success will always be dependent on your individual input and commitment. Going into business is exciting and a dream for many people, but for those that can follow time proven systems and procedures a franchise business offers a route unlike any other.  

For further guidance on getting started in a Prima Ardelle Associates business Contact Bonita Wood, Co-Founder on 0845 899 0007 or mobile 07956 464303 or email