Handing over the keys to your brand can be extremely difficult, but, done right, can bring huge rewards. Here’s how to recruit responsibly
The first and most obvious requirement of the perfect master franchisee is that they must be financially qualified. Those who believe it’s like running an individual franchise will soon encounter problems, as they will fail to appreciate exactly what is involved in creating an entire business ecosystem. This is not something for a beginner to contemplate.
As well as a significant initial outlay, the master franchisee must bankroll the necessary training, recruitment, advertising and marketing as well as ensuring everything runs smoothly and efficiently and that their franchisees have the knowledge and necessary support for success. In return, the rewards are great.
My own success was built on strong foundations. When I launched, I first undertook a five-year pilot project to ensure the concept would work both as a business and as a franchise as I wished to create a model that would give others an opportunity to run their own businesses.
How I recruited my Australian master franchisee
I followed a similar process when agreeing on a 15-year master license with Bernard and Janet Bannon in Australia. Since they launched in 2005, the business has grown to more than 30 Ovenu franchisees currently providing professional oven and BBQ cleaning services across the sixth-largest country on earth.
As a result, they receive the lion’s share of the rewards, attracting a significant percentage of the franchise and ongoing royalty fees – reflecting their hard work and dedication in recruiting, training and providing ongoing support to franchisees.
They also display many other attributes vital to the perfect master franchisee: patience, a methodical approach to business, and being comfortable with the whole concept of duplication and replication.
“With the master franchising system you must accept a certain delegation of control as an inevitability”
It’s also a case of horses for courses and the selection of a master franchisee is very much dependent on the type of business involved. For example, a corporate franchisor should seek someone from the corporate world while owner-operator franchisors should look to appoint an owner-operated master franchisee.
Believe in the brand
A master franchisee doesn’t necessarily need experience in that specific industry – as full training will be provided – but they must demonstrate business acumen.
I was fortunate in as much as Bernard and Janet already believed in the product and the brand. They were running a restaurant in the Channel Islands when they had their oven valeted by their local Ovenu franchisee and immediately recognized the business potential.
English-born Jane and Irishman Bernard were already thinking of returning to Perth in Western Australia and got in touch to discuss the possibility of launching the franchise Down Under.
The first step involved myself and my then franchise adviser visiting them in Jersey for a series of meetings as we began to carefully assess their suitability.
Firstly, they were the perfect blend for this people-led business. Janet was a talented administrator and organizer while Bernard was a born salesman with fantastic people skills. It’s essential that a master franchisee must always treat their franchisees as customers.
Between them, they had the necessary capital and completely understood the concept and their market. They also recognized that we knew the business and had confidence in the pilot business scheme we drew up for them – something they could both learn from and replicate.
They also possessed local knowledge of the country, business experience, entrepreneurial spirit and had a robust business plan.
Bernard and Janet instantly saw the benefits of a master franchise, operating a tried-and-trusted system and brand, which in turn would allow them to quickly build a network.
More than that, they recognized the need to achieve two separate and important tasks: running the business and expanding it, each of which requires different skill sets.
Replication and duplication
As franchisor, I retain tight control of the business in the U.K. to ensure standards are maintained, but with the master franchising system, you must accept a certain delegation of control as an inevitability.
This is particularly true to master franchise agreements abroad, where the franchisor relies on someone else to operate in a manner appropriate to that country. This means you must always ensure you are able to work closely with and trust the master franchisee.
It’s not a complicated business model and is based upon replication and duplication. In my case, the master franchisees were happy to be guided and I, having met them and planned things through in detail, had confidence in their abilities.
They returned to Australia in 2004 and registered Ovenu Canning Vale in 2005 but as part of our agreement, I insisted they operate the business for a year as a pilot business scheme before they began recruiting franchisees.
It was an important learning process, allowing them to learn the practical aspects of the business so they knew everything there was to learn about oven cleaning as well as the operational skills necessary to run a business.
The key to everything is communication. When operating abroad it’s important to speak the same language as I find things can easily become lost in translation – not counting the confusion caused by differences in the local legal system and business and consumer cultures.
“Failure to recruit the right master franchisee runs the risk, especially in these days of social media, of brand annihilation if things do go badly wrong”
No two countries are the same – even regions within a country have different distinct characteristics – so a knowledge of how things are done is highly desirable.
In this case, we even produced an ‘Aussie-fied’ version of our U.K. franchise manual, so nothing was left open to misinterpretation.
As part of the 15-year master license agreement, Ovenu continues to offer its support and guidance, together with its environmentally-friendly cleaning products, which are shipped from the U.K. to ensure continuity.
As in the U.K., the Australian operation believes strongly in a re-investment policy, constantly updating its consumer-facing and franchisee recruitment websites.
It has also invested in client management software, enabling franchisees to manage their businesses, retain clients and market effectively by providing valuable reports and management tools, the result of several years of research and development.
It also uses a professional call center to handle all incoming calls – which can be relayed to franchisees by text and email – ensuring they never miss a call and that its 100,000 clients a year receive a prompt and professional service.
Bernard and Janet have built up a reputable brand in Australia, having been members of the Franchise Council of Australia since 2006, operating under their strict code of conduct.
As in the U.K., most clients are repeat customers, with many franchisees going on to expand their businesses, operate extra vans and generating more profit.
Failure to recruit the right master franchisee runs the risk, especially in these days of social media, of brand annihilation if things do go badly wrong.
However, my own experience in Australia has given me the confidence to examine the possibility of setting up further master franchise models – but that’s always dependent on recruiting the right candidates.
The system has allowed me to develop my brand throughout Australia – which would not have been possible otherwise.
Despite the distance, I continue to keep in close contact and am a regular visitor Down Under. They have a proper system in place with a trained person representing every state and I occasionally attend their annual conference and meet their franchisees as I believe it’s important that the franchisor is always available to provide support and guidance when necessary.
My long-term aim is to develop master franchises in other English-speaking countries around the globe, as well as introducing the model to selected European territories.
There are many advantages but both sides must always ensure they are well informed and well organized if they are to reap the considerable financial benefits whilst mitigating any risks.
9 KEY ATTRIBUTES SUCCESSFUL MASTER FRANCHISEES MUST POSSESS
1. Ability to make a significant investment of both finance and time
2. Proven record in business
3. A good knowledge and awareness of the relevant business is a benefit but not essential
4. Ability to cope with the demands of running a successful master franchise business, often by owning and setting up a franchise pilot business first
5. Belief in the brand and a willingness to support franchisees
6. Desire to enforce consistency through duplication and replication of a winning formula. Don’t select a master franchisee you don’t believe will follow the company’s system as even the strongest business model can be made ineffectual by a weak master franchisee
7. Ability to create positive long-term relationships with both franchisor and franchisees
8. Familiarity with local laws and customs
9. Management and sales experience
THE AUTHOR
Rik Hellewell is the managing director of oven valeting franchise Ovenu, which he founded in 1994. Since then Rik has gone on to recruit hundreds of Ovenu franchisees into the network across the U.K. and Australia
