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Franchisees Need to be Prepared


A new franchisee needs to have his or her team identified and in place, before the franchise is opened. In addition, the franchisor should know how the franchisee intends to operate their franchise.

Before purchasing a new franchise a future franchisee should have a plan, know the key responsibilities and structure of their franchise staff. As it gets closer to signing the franchise agreement, key questions need to be answered and plans put in place. One area that requires a great deal of thought and planning is who the franchisee will rely upon to help manage the new franchise. Iíve seen instances where a new franchisee had planned on having a particular person work in the franchise and the person had a last second change of heart. Iíve also witnessed firsthand, instances where a franchisee hired new employees who literally stood around and were on the payroll before the franchise was up and running.

Screening, hiring and deploying the right people to help the new franchisee operate their franchise is a key requirement for a successful franchise.

Here are some suggestions for franchisees regarding their key team members:

1. Identify the functions and responsibilities that need to be performed and who will do them. Before determining who youíll need on your team, you will need to know what needs to be done. The franchisor should have employee profiles and job descriptions. If these arenít available you should question the quality of franchisor support and resources. Be sure to identify the hiring sequence. What position is most crucial to starting up the franchise? Will you need one highly qualified person or two people at roughly the same cost but with fewer qualifications meet your needs?

2. After the responsibilities and positions have been identified plan how youíll recruit. Do you have anyone in mind? Will you need to advertise the positions? Is a spouse of the family member working in the franchise? Do you plan on networking to find someone?

3. Identify the timing of your hires. Donít bring staff on too early and pay unnecessary payroll. Unless you anticipate the franchise getting off to a smashing start you want to avoid having excess staff at the beginning. Conversely, if you delay bringing the right staff on board the franchise operation could be more difficult to manage.

4. Determine how the key staff will be compensated. Consider using bonuses and incentives that are performance based. This approach could help preserve valuable working capital during the start-up phase of the franchise. It may help attract motivated and confident individuals who have the self confidence to perform well. Avoid granting equity in the franchise except to an investor.

5. Have a plan for replacing employees who leave the franchise unexpectedly. The smaller the franchise, the more important employees will be to the operation of the franchise and the more difficult it can be to replace them. This is why itís important to carefully plan your staffing needs and thoroughly evaluate employee qualifications.

Individuals considering a franchise need to plan and identify the key members of their staff. Before a franchisor grants a franchise they should question the prospective franchise about their staffing plans. Their response could serve as an indicator as to their qualifications to be a successful franchisee.

© 2013 FranchiseKnowHow, LLC

Ed Teixeira is the President of FranchiseKnowHow, LLC. He can be reached at franchiseknowhow@gmail.com


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