As you are reading this magazine, very probably you’re a franchisee looking for your next business to invest in, or a franchisor considering a new candidate to buy into your brand. The initial phone calls have gone well, the financials are right and you have a gut feeling that the fit is there. There is something to be said about our gut instincts. However, when it comes to making an investment decision on a franchise system or a prospective franchisee, leaving it to instinct is simply not enough.
Sound business decisions take research
Franchising is rich with business opportunities: the well-known franchise systems do not scratch the surface of what is available. But what has proven a successful opportunity for one person may not be as fruitful for the next. So how does a franchisor or a franchisee move beyond financials and the gut feeling that he or she will be successful?
Oddly enough, science provides a solution
As with personal relationships, business relationships built on compatibility are much more likely to succeed. Having completed research with successful franchise owners and franchise systems, Zoracle Profiles has uncovered markers that indicate the likelihood of long-term success and satisfaction for the franchisor and franchisees when it comes to selecting their investment.
Shared values
We believe values are the number one indicator of compatibility. Our values define us: they govern our desires and how they are expressed. Values are what motivate us and shape our behaviors. But how does that relate to selecting a franchise system? I’ll tell you. If a franchise system values innovation and risk while a franchisee values traditional and risk-adverse business tactics, it’s easy to see how that would quickly create tension between the two. Ensuring that the core values of what drives a business and the franchisee align with one another is the key for long-term compatibility and success. When values are at odds, the stress caused by the misalignment can be painful.
Shared stage of growth
Franchisor and franchisee need to share a similar rate of growth. Businesses, like people, evolve over time. Consider this: if a franchise system is in an early stage of growth they likely have not fully developed best practices and market penetration, and could still be developing the brand as a franchise. A system at this stage would need a more entrepreneurial candidate who is conformable with the hands-on ownership and collaborative culture between the franchisor and franchisee that is common in the early years of a franchise. A later-stage candidate that excels at exploiting systems and following a well-developed process would find an early-stage franchise system challenging.
Shared culture
Culture evolves through the values of an organization. Finding ourselves in a place of cultural misalignment creates dissatisfaction and will eventually decrease our performance. We’ve all been in jobs or situations where we were not a good cultural fit. Our president at Zoracle offers a great example of when she was no longer a cultural fit. For her, it was when the company she was working for was bought out and new management came in. The original culture had allowed for autonomy and innovation – the new culture was one of micromanagement and rules. The emphasis when selecting business opportunities and franchisees should be compatibility, and not gut feeling.
About the Author
Aubree Coderre is the Director of Business Development for Zoracle Profiles, a franchise profiling firm located in San Diego, CA. Zoracle Profiles is a franchise-specific solutions provider offering a suite of customizable psychometric assessments for both franchisors and franchise consultants. Our science-based tools solve franchise recruitment, selection, training and support challenges. Take our SpotOn! assessment here: http://zoracle.net/assessment/welcome/gfm
