What is the Key to the Happy and Successful Franchisees?

What factors do you look at when recruiting franchises?  Do you look for the prospective franchisees with a college degree, prior business ownership experience, or industry experience?  Recruiting and identifying prospective franchises that will be successful and happy franchisee owners is a challenge facing every franchise.

[T]the motivation for an individual buying a franchise is much different for someone who has never owned business versus an individual who has previously owned a business.  In contrast, individuals who have been previously self-employed value the competitive advantages that franchises have over small independent businesses [Kaufmann & Stanworth, 1995].

A recent study entitled THE INFLUENCE OF HUMAN CAPITAL FACTORS ON FRANCHISING by Martin J. McDermott and Thomas C. Boyd from Purdue University Global which appeared in Small Business Institute ® Journal provides some interesting insight.  The study is based on 251 of 1,280 randomly selected home repair and improvement, maintenance, cleaning, and business service franchisees that responded to a 25 item self-administered mail survey.

While many studies have found a positive relationship between education and entrepreneurship, there were no significant differences found in satisfaction between franchisees that have a higher level of education versus franchisees with a lower level of education.

The study offers the following practical suggestions;

  • [F]franchisees who have never owned a business prior to buying a franchise most appreciate the ability to do things that don’t go against their own conscience.
  • [A]a market of aspiring entrepreneurs may be found in the Corporate America segment. A popular description of franchising suggests it is a way of being in business for yourself but not by yourself, which might appeal to the Corporate America sector.
  • [E]education and industry experience should not be core factors in deciding if a candidate is a strong fit for a franchise.
  • [I]individuals who have not owned a business prior to buying a franchise should be seen as an asset and not a liability to funding.
  • Because a system is in place, franchising allows an individual with no prior business ownership or experience the opportunity to be an entrepreneur because it can be taught and learned.

Caution in applying the study.

As stated the Study was limited to home repair and improvement, maintenance, cleaning, and business service franchisees.  For example, if you are a restaurant franchise model will the practice suggest hold?  The survey respondents were 41 percent business service franchisees, 32 percent maintenance and cleaning franchisee, and 26 percent home repair and improvement franchisees.

The survey respondents were overwhelming 40 years and older.  Eighty-five percent of respondents were over 40.  How about the newer generation of the franchisees?  Will the results be different? Furthermore, the study is largely based on men.  Of the 251 survey respondents, 204 or 81 percent were men.  Is the same true for women?

What is your experience?  What do you look for in franchisees?  Looking at your historical franchises, what are their educational backgrounds, work experience, and business ownership history?

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