Specialist advise

Don’t stop moving

Derrick Simpson reveals why recruiting for resales requires a different approach

Recruitment is recruitment. We all appreciate it isn't easy to find the correctly qualified candidates but surely it's just about persevering isn't it and why should resales be different?

Whilst some franchisors notoriously apply the ‘mirror and cheque book' test in their franchisee recruitment processes, the vast majority do screen prospective franchisees diligently.

They will have an idea of the essential and desirable skills and experience they need to see demonstrated by a candidate that will enable them to be a successful franchisee within that particular brand. Most ethical franchisors will go beyond the superficial, ‘if they want to buy one they can have one' attitude, that will inevitably bring subsequent failure, and rather approach franchisee recruitment in a structured and measured fashion.

The same structured approach should be used whether recruiting for a new business location or an existing business, but are the key criteria or skill attributes for the prospective purchaser also the same, and what do we do when the selling franchisee presents a person with whom they have agreed
a deal?

That last point is also the one which has the greatest potential to cause conflict and trigger the breakdown of an otherwise stable relationship. It comes about when the franchisor fails to manage the resales process effectively and is then faced with the situation of being pressured, by the franchisee, to accept the purchaser as approved. That's all fine if by chance the selling franchisee has found a candidate with the right skill set. What usually occurs is the seller finds a purchaser that will pay the price they want, which is not necessarily the same thing as finding one who is an equal or better candidate to take over the business.

In these circumstances the franchisor is either facing the dilemma of turning down the purchaser and causing the agreed sale to collapse or turning a blind eye to the potential failings of the purchaser, so as to get the sale through and ensure the selling franchisee leaves happy. I'm afraid this latter course of action is the one often taken with the resultant effect of diluting the strength of the brand over time. This type of approach shows the franchisor is neglecting their responsibility. If the new franchisee fails it will store up problems in the future.

If you are letting your franchisees manage their own resales at least let them know, in advance, the criteria you will be adopting in approving or rejecting their purchaser.

There a difference between purchasers of resales and franchisees who start up a new location or territory from scratch. To open a new franchise you will be seeking franchisees that have the best opportunity of being successful - naturally. Some franchisees will carry out the delivery of the service themselves, other franchises will expect the franchisee to be the manager of a number of staff who deliver the function and some expect the franchisee to be able to go out and sell directly into their chosen marketplace.

With resales, the business being purchased is already trading, and whilst the size and volume of business will vary from brand to brand the principle remains that the new franchisee will be ‘getting on a moving train'. From day one they must assimilate the business and deal with the challenges that are thrown at them. From a franchisors perspective it is usually more difficult supporting the early days of a resale after handover and this is even more the case if staff are involved and personalities come into play.

This means the specification in terms of skill set and experience for the purchaser of a resale will be different. Even at the man-in-van end of the business spectrum, the new owner will encounter challenges that would not be there in a start up situation. This is emphasised even more when the acquired business is of a larger scale. Premise-based operations with staff and production will be more complex, which means the new franchisee must actually be a better candidate than for the equivalent start-up operation.

They will need to be able to multi-task and take on board a wide range of situations that a franchisee in a new location simply won't face. The resale owner has to drive the existing business and also start to grow it. They will need to get to know and manage staff, who may not like the fact the business has been sold, so their people skills should be well honed.

When Franchise Resales is sourcing candidates for approval by franchisors, it always take a detailed specification of the essential and the desirable qualities they are seeking. Whilst the final choice of candidate is for the franchisor to decide upon, the people they are meeting must fit the criteria for new franchisees and have that extra element needed to be successful with a resale.

The training and operational support of a franchisee who has acquired a resale business will be that much easier and effective if the selection of that franchisee has considered the additional skills needed to take on and develop an existing business.