Only after the feasibility study, the legal work, the business plan, the operating manual and the pilot unit have been completed, can the prospective franchisor launch the operational development of his network. On the agenda: the (crucial) recruitment of the first franchisees, and the first positions in its support structure.
We’ll conclude this guide to setting up a franchise network with two key points: What human qualities do you need in a franchisor? And why should it rely on franchise experts right from the start?
Recruiting franchisees with care
From the very first franchisees onwards, the franchisor must manage his network, supporting his entrepreneurs at the opening and throughout their contract. Indeed, ongoing assistance in implementing know-how is one of the pillars of franchising.
“You have to take great care when recruiting franchisees, because if they don’t perform well, how can you prove the concept’s effectiveness and profitability?
It’s important to meet each candidate several times, in different contexts and circumstances, to get to know their personality and understand their project. In an office, we can only see part of his personality, whereas in a pilot unit, we can observe his reaction to stress or customer contact.
It’s also imperative not to make decisions on your own, but to test a candidate against the judgement of your colleagues, for example by the pilot unit team using a form. Everyone has a different perception of the same person, and can express their vision of personality in several dimensions,” explains Laurent Poisson, head of Participe Futur and trainer at the Académie de la Franchise.
On average, 1 candidate in 50 becomes a franchisee…
When starting out, it’s important to write down the commercial policy for your development: franchisee profile, selection criteria, where this target is and how to communicate with it, which territories to invest in first…In any network, the first five franchise candidates are pioneers.
“They know that the concept remains a risk and represents a great opportunity. They can accept that the concept is not finalized if it remains profitable, and show tolerance during the franchisor’s apprenticeship phase. On the other hand, if the prospective franchisee is too rigorous or formalistic, there is a relational risk,” stresses Laurent Delafontaine, director and co-founder of Axe Réseaux.
“The first franchisees, ambassadors for the concept, are just as adventurous as the franchisor, who learns his trade by walking, and can make mistakes even if he has to limit them. They may come from the franchisor’s professional or personal environment: one of his employees, one of his suppliers, or a friend who has responded favorably to the mutual selection process.
To maintain a steady pace of openings and improve performance, the franchisor needs to commit a sufficient communications budget to generate enough inbound leads. It’s a mathematical fact: on average, 1.5 to 1.8% of prospective franchisees become franchisees. Above 3% is a very good performance. Recruiting a franchisee costs €8,000 in communication costs. You have to readjust the messages given and the media plan if the profiles don’t match expectations,” explains Jean Louvel, Progressium partner and expert in franchise network creation and structuring.
During this period of concept finalization, the franchisor creates a special relationship with his first franchisees. “Hence the need to share essential values, and therefore to determine them upstream. What’s more, casting errors are costly and time-consuming for the franchisor and his team,” warns Emmanuelle Vaillant, associate consultant at Franchise Management.
Getting on board with good people
A young network needs to recruit pioneering profiles, who can accept the imperfections of the concept at the outset.
“If the first franchisees recruited don’t achieve their objectives, they’ll have to be able to question themselves and rely on the head of the network, rather than incriminating it. They are in a position to convince us, by showing that they know not only the concept, but also its future location and economic zone. They have to make the franchisor want to trust them.
The most important thing is to get on board with valuable people, who enter your business to the point of becoming part of your team, and who give you the feeling of being part of the same adventure,” insists Arthur de Choulot, head of DreamAway.
Humility, listening and exchange are required from the very first contact with a potential entrepreneur under your banner. “We refuse to recruit franchisees by default, or out of need. If we want to be the benchmark in our field, we have to work with the best.
Pedagogy is required: the franchisor must never be in a hurry, and must know how to give time to the franchisee. You have to help it grow, but you also have a lot to learn from the franchisee,” says Sébastien Vernay, Associate General Manager of the Préservation du Patrimoine Energie network.
Strict rules to provide the keys to success
Franchising offers the opportunity to retrain, thanks in particular to the training provided in advance by the brands. “Our franchisees, like ourselves, are neither doctors nor pharmacists, two professions to which we redirect our customers if necessary. Their credibility will be underpinned by several weeks’ initial training, currently being defined, and ongoing training, to be carried out on a regular basis. We received two awards at the Passeports de la Franchise – retail and Frey, a commercial real estate company. This award confirms the viability of the concept and recognizes our efforts by professionals in the franchise system, which gives us credibility with applicants,” notes Louis Gobron, head of the Louis Herboristerie network.
Consultation with franchise experts makes it easier for the prospective franchisor to make a positive or negative decision. “Our initial aim was to develop our own network, in order to maintain service quality and our brand identity. I realized how difficult it was to manage such a remote location.
I consulted franchisors and obtained two types of opinion: enthusiastic about the profitability of the franchise system, or recommending hyper-vigilance due to the absence of hierarchical relationships. I opted for this system to speed up development.
Franchising offers a more secure framework for everyone, franchisor and franchisees alike, with strict rules to give them the keys to success, without the risk of creating a competitor. My future franchise partners will be able to play my role in our Parisian stores, that of field manager… and they’ll certainly do better than me! “smiles Alexis de Galembert, manager of La Fabrique Cookies.
Developer and animator: the first two positions to be filled
With development in mind, it’s crucial to anticipate the recruitment of your team. The franchisor has three jobs – developer, animator and trainer – which he must delegate from the outset of his network.
“Developer and animator: these are the first two positions to be recruited, but it’s impossible to do both jobs at the same time. If the developer charms the candidate, the animator gives him ways to improve once he’s become a franchisee. The former is a hunter, the latter a breeder”, says Jean Louvel, even if some experts recommend initially coupling the two functions.
“The first recruit must be the animator – who can also be a seconded employee. This person will ensure that the launch of the first franchisee is a success. It’s easier to find a candidate when you have proof that the concept works as a franchise”, suggests Laurent Delafontaine.
From stubbornness to emotional intelligence
The most important factor in a franchise’s success is the franchisor, even if he or she has excessive financial resources.
“Candidate franchisors need to possess certain human qualities: incredible motivation, energy with a good physique, charisma and inspiration to lead their franchisees, the ability to communicate, a good entourage, high morale and stubbornness. Entrepreneurs who have struggled often know how to keep it simple,” explains Laurent Delafontaine.
This list of the essential human qualities of a prospective franchisor is by no means exhaustive! “A certain “emotional intelligence”, i.e. knowing how to be psychological with others, is recommended, as well as resilience, and a real ability to accept questioning, especially about one’s concept. Above all, the candidate needs to be a charismatic leader, to get people on board: franchisees, network head office staff, bankers, suppliers…
The future franchisor must also be able to free up days in each week to drive his project forward, for example by delegating his pilot units to in-house outlet managers. Setting up a network is an exciting but time-consuming task, which requires you to sit back and think about things in detail, whereas until now, you’ve tended to think in global terms,” recommends Emmanuelle Vaillant.
Isn’t franchising more expensive than setting up a new store?
The franchisor’s personality, motivation, willingness to help others grow, and ability to surround himself with people are all key to success. “To succeed as a franchisor, you have to love people, and invest yourself in them, without lapsing into compassion.
When it comes to passing on their know-how, future franchisors, who are used to managing their own outlets, must understand that they will have to accept that their franchisees will not manage exactly as they do. By using a different management method, for example. The franchisor doesn’t have the same control over his teams as he does with his own operations. He can only make recommendations, because beware of interfering in the franchisee’s business!
He needs to get out of the operation of his pilot sites to prepare for his launch as a franchisor, putting all his energy into his new job as a franchisor, so as to be ready in 3 to 6 months. Otherwise, the project drags on, and the longer it takes to set up, the harder it is to complete.
In the home improvement sector, for example, if the future franchisor generates most of his sales from his pilot agency, he needs to find a trustworthy sales representative who is as efficient as he is, while the franchise project is being set up.
Franchising remains a profession, a business project, not an opportunity. It’s like setting up your first restaurant or store, with a certain order: business plan, selection of suppliers, values that set you apart from the competition, and so on.
Too many franchisors start by having a contract drawn up, just like their competitors. But does it correspond to your project and your needs? First of all, you need to identify your services, your animation, your communication budget, your purchases for the franchisee… and only then build a contract adapted to the model.
Starting up a franchise isn’t as expensive as opening a new store. But to expand rapidly, you need to devote time to the transition to franchising. And it all starts with preparation, with a 5-year business plan, so that the franchisor is fully aware of the steps to be taken, particularly in terms of human resources to support franchisees. In short, always think ahead to push back your own glass ceiling.
A common pitfall is wanting to do everything for franchisees, to the point of creating a special relationship with the founder, which is detrimental to subsequent franchisees,” says Jean Louvel.
Avoid mistakes that waste time, energy and money
Expert support is the key to successful network development. ” Si vis pacem para bellum: he who wants peace should prepare for war. If you’re going to fight, you have to rely on your skills, not on luck, even if it’s provoked. It’s all in the art of preparation.
There are many exogenous factors that make it impossible to predict the success of a concept. But we can limit errors by rationalizing in relation to the figures, and by being aware that the human factor also makes a difference to sales performance…
The role of a consultant is to help structure the project from the outset, to explain the mistakes made by the franchisor, and to help it grow through long-term support,” says Jean Louvel.
A franchisor buys three things from a firm specializing in network launch and management: its expertise and experience in the sector, dedicated resources, and tools and processes linked to its business. “There are networks that were created without any experts, and which have integrated former franchisees in key positions, such as franchise director.
A firm of experts has accumulated real feedback, tools, methods and pedagogy. It avoids mistakes: registering the trademark, ensuring the contract is of the right duration, defining the amount of the entry fee, etc. It provides a directory of other experts, such as lawyers specialized in franchising, helps to draw up tools such as the operational manual – reflecting best practices in the concept – and also offers resources dedicated to the franchisor, such as a writer for the operational manual,” assures Laurent Delafontaine.
Added value: benchmarking with other networks
When launching a network, we recommend that you be assisted in becoming a franchisor by a specialized, experienced firm.
“It helps you to take a step back from your concept, to take a factual look at its feasibility through benchmarking with other networks, and to benefit from the best practices of the franchise system. This saves the prospective franchisor time in decision-making.
After the feasibility audit, for example, our firm gives a factual indication of the road still to be travelled and set up to become a franchisor, and what this implies for the prospective franchisee, in terms of financial resources and time investment”, illustrates Emmanuelle Vaillant.
The French Franchise Federation offers training on the subject of network creation. “These 3 days force prospective franchisees to take a break from their day-to-day activities, and enable them to meet other project owners. They become aware of all the dimensions of their project, and have the necessary distance to think things through. This generally reinforces their desire to go ahead, fully aware of all the levers to be deployed”, concludes Laurent Poisson.
