Pile ‘em high

The thing is, as a franchisor, you have to decide on your recruitment strategy:

Careful selection of the right person who is going to enhance the network, stay with you for the long term and generally be a great asset to your business.


Got a cheque book?  Got a pulse?  Good: you’re in…

Now, whatever you think about either strategy, both are valid (kind of) but there are consequences to both.

Let’s consider strategy number 1: careful selection.  Generally accepted wisdom is that this is the way to build a network and I wouldn’t necessarily disagree.  Growth in numbers will be slower but in the long run the network will be stronger and happier.

You see, you tend to get a better fit of people who are more comfortable in their position and their business.  As a result, for the franchisor there tend to be fewer arguments, challenges and issues.  Growth in royalty is more certain, too; and this has to be the ultimate goal for every franchise

It’s also fair to say that happy, carefully selected franchisees tend to be more ‘sticky’… that means the business will be worth more and easier to sell.

You can be damn sure that any potential buyer, as part of their due diligence, will ring round the network to see how happy they are.

So that’s the case for the prosecution, let’s hear it for the defence.

Strategy number 2: The pile ‘em high strategy, whilst controversial, deserves a hearing.

The thing is, as franchisor you have to recognise that the turnover of franchisees is going to be much higher.  Consequently you have to advertise more to make sure you have a decent pipeline at all times.  (Incidentally, if you are carefully selecting your franchisees, your recruitment process will take longer and cost more).

It also means that you have to have a watertight contract so you can get low performing franchisees out of your network quickly and easily.  Thinking about it, you have to have a watertight support function (by watertight, I mean ‘thick skinned’) because they are going to take some abuse by low performing franchisees.

But, the up side is that you will get lots of money from franchise fees… that will be offset by the slower growth of the feebank.

Hmmm… as you begin to think about it, there probably is only one way to build a really successful network: recruit the right people who will help you build a strong and happy franchise.

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