Hear no evil, speak no evil, see no evil…

Once upon a time there were three guys, each of whom wanted to buy a franchise.

The poor franchisor had only one franchise left to sell and had no idea who to award the franchise to. Each of the potential franchisees seemed to be a good choice, but each had their own reason for buying…

Hear no evil has worked in the same industry as the franchisor for thirty years but has always harboured ambitions of running his own business.

Speak no evil has always been in a different industry altogether, but has been made redundant a few times and wanted to take control of his own destiny. He thinks he has some aptitude for the service, but has never done it.

See no evil has money. He can see the money making potential of the franchise but has no intention of running the business himself. He’s buying for cash, but going to put a manager in straight away.

If you had to choose one of these guys to be your franchisee, which one would you choose… all other things being equal?

Of course, all things won’t be equal; there are personality issues, location problems and a whole range of other things. But if they were equal each of the guys comes with pros and cons.

The guy wanting to run his own business who’s been in the industry for years will be good at the job, but may question your processes. There’s also the danger that he’s buying himself a job… and that’s never a good thing. In Michael Gerber terms (The E-Myth) he’s a technician and wants to do the work. But what about all the other stuff, such as the VAT Return, employing someone and the admin? He may not be so good.

The guy who wants to try his hand at your business because he wants to take control of his own destiny may be a good choice. He’ll be driven to succeed and may not have that much money to back him up – that means he has to start earning… fast. But what if you’re in a complex business and he can’t do it? Or, even worse, he can do it, really enjoys it and gets stuck into the work and forgets to do the marketing to grow the business.

Finally, the investor franchisee – he’s got the money… and probably more besides. He’ll pay up and put someone else in charge. He won’t have a vested interest in the business and this could be a bad thing. What if he sends his manager on the course and then they leave? Who’ll run the business then? The franchisee? Unlikely. They’ll either lose interest or have to wait until your next course for a new manager… and the cycle starts again.

It’s such a quandary! And just about all franchisees fall into one of these categories.

So, what’s the right answer? Who would you take?

Well, there is no right answer but there is a wrong one. You have to make sure that you recognise the potential issues and make sure you manage your franchisees in the right way – it’s all down to your franchise system and the advice you get when you set up.

And the wrong one? Investment franchisees are nearly always difficult.

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