Part 2: How to determine if a franchise is a right fit for you
Last month in my article The One Question Everyone is Asking we addressed the right stuff part of the “Right Stuff + Right Fit Success Equation”. In this article let’s discuss how to determine if a franchise system is a right fit for you.
I have spent 23 years in franchising. My company, Zoracle Profiles provides psychometric assessments which help franchisors and franchise brokers determine franchisee-franchisor compatibility. We do about 150 assessments a day. So you are in good company when considering franchise ownership. There are 5 primary things to consider when determining which franchise is a good fit for you.
Your #1 priority is to pick a franchise company that shares your values. Why is values alignment important? Matching your core values with a company’s core values creates compatibility and harmony. Like-minded people have a basis for understanding, communicating and exercising judgment. Values alignment builds strong brand recognition. Our research and that of others, show that there is a strong link between financial performance and values alignment. When the values of a franchise organization are in alignment with your aspirational values, the result is high performance and greater satisfaction.
I sat in on a presentation between a franchise broker and prospective franchisee. When the broker suggested a signage business the wife pushed back, saying there was too much competition. The husband on the other hand, loved the idea because there was competition. He liked to innovate and create. Life was no fun without challenges. He could easily see ways to elbow out the competition. His values were in alignment with the franchise organization and its business model.
Stages of Growth
Every company goes through five predictable stages of growth. As a franchise organization grows, the systems and procedures will adapt to support an evolving business model, the needs of the franchisees and to satisfy end-user demands. Within each stage of business a franchisee’s skills and goals need to complement a franchisor’s plans and market expansion strategies. If you are in-step with the franchise organization’s Stage of Growth you will prove more compatible and likely perform better. To learn more click here: From Start-up to Supersized.
Some time back I spoke with a man who had purchased 3 different businesses over a period of 5 years. The first he never launched. The second, he simply closed the door and walked away. The third the franchisor bought the territory back. All 3 were early stage franchise concepts and have done well for other franchisees. What then was his problem? He loved the idea of first to market and was often distracted by ‘shiny things’ like opportunity. However, his SpotOn! Profile results suggested he needed to be in a more established franchise system; with strong brand recognition. He was not the pioneer or hunter he believed himself to be. Today, he runs a successful business in a Stage 4: Empire franchise.
Why is culture important? Culture determines the environment, strategies and practices that inspires and engages employees and franchisees to perform optimally. Culture is important to company morale and maintaining good relationships. The key to using culture to improve performance lies in matching cultural attributes to franchisee goals. A culture that is congruent and clearly communicated provides endless benefits to you as a franchisee including greater effectiveness and strong brand recognition. A franchisee who shares a company’s culture will prove more compatible.
We’ve all been in jobs or situations where we were not a good cultural fit. For me it was when the company I was working for was bought out and new management came in. Where once I worked with autonomy and ability to innovate – I now found myself with a boss breathing down my neck and rules out the yin-yang. Make sure you are a culture fit before buying a franchise.
For greatest satisfaction and effectiveness, one should seek a work or business environment consistent with their natural tendencies. Work Style is particularly important for the business owner as you will set the pace, priorities and direction for employees, partners, vendors and clients. Work Style translates into how you will delegate, direct, motivate, manage, evaluate and resolve day-to-day business situations.
Thinking about work style reminds me of a woman who bought a yogurt franchise, who quickly discovered she didn’t like working with teenagers. Additionally, the business was fast-paced and required lots of interaction with customers. She was quiet and introspective, the noise and the sheer number of customers overwhelmed her. Worse, although the business was successful she felt empty inside. This was due in large part because she was not a good fit for this business model.
Understanding your business competencies is important. More important however, is how those competencies complement those of a franchise system. Complementary Competencies provide a framework for forming collaborations between franchisee and franchisor. In doing so it presents numerous ways of correspondence between the expertise of the franchisor and your skills as a franchisee. Complementary Competencies reduces redundancy, makes wiser use of resources, provides points of correspondence and thus greater value, compatibility and performance.
If you were putting together a baseball team you wouldn’t do so with six catchers, one shortstop, an outfielder and no pitcher. You would make sure all your bases and field where covered. The same is true in franchising. When selecting a franchise be aware of your weaknesses. The areas where you are weak you want a franchisor strong. If you are weak in administrative or customer service functions either chose a business that requires little of that or find a franchise with systems that make those functions a non-issue.
There are two parts to the “Right Stuff + Right Fit Success Equation”. First determine if you have the right stuff and then and only then search for the right fit franchise.
Learn what your values, competencies and cultural fit are with the SpotOn! Profile assessment.
Rebecca Monet is chief scientist and president of Zoracle Profiles. Zoracle is a franchise specific solutions provider offering a suite of customizable psychometric assessments. Zoracle’s SpotOn! meta-analysis provides insight no singular profile, survey, algorithm or assessment can. Our SpotOn! science determines franchisee-franchisor compatibility and predicts performance. Zoracle reduces recruitment and support costs while increasing franchisee validation and performance.