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As a business owner, there comes a time when you are ready for expansion and may consider franchising your business. Suppose you have been operating your medium-sized furniture wholesale store for a few years, and have several franchisees operating throughout New South Wales and Victoria. Now, it is time to step it up and go against bigger competitors such as IKEA. To do this, you must broaden your franchise network by recruiting more franchisees.

This can also be the perfect opportunity to expand to new locations. This article will outline seven tips for recruiting responsible franchisees to help you get started. 

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1. Look After Your Existing Franchise Network and Franchisees

If you wish to recruit more franchisees to your network, it is vital to gratify your existing franchisees before you recruit new ones. Maintaining good relations with your franchisees opens up possibilities for them to recommend your franchise network to friends and family. Ultimately, they can be a potent marketing tool for your business.

It is also essential that you look after your existing franchisees as potential franchisees can get in contact with the current members of your network for references. This is notable because your existing franchisees’ contact details should be listed in the disclosure document. You should make sure to communicate with them and look after them so they can best promote your business to potential franchisees.

2. Encourage Your Existing Franchisees to Provide Referrals

As stated above,  your existing franchisees’ marketing power is extraordinary. Rather than spending time and money on websites and recruitment agencies, you can start by asking your existing franchisees for referrals. Remember that any referral fees and your existing franchisees’ contact details must be disclosed in your disclosure document.

3. Give Additional Territories to Existing ‘Good Franchisees’ 

While referrals do not directly relate to recruiting new franchisees, it is a valuable option for franchisors.  

You can always reward existing franchisees with additional territories or units, sometimes at a discounted cost. It is important to ensure that these franchisees you consider rewarding additional territories are mature and capable of running more than one unit concurrently. This could benefit both you and your existing franchisee. 

Rather than spending money and time training new franchisees, you can trust your existing franchisee to operate additional units or territories based on their knowledge and experience in your operations. It is also beneficial for franchisees as they will gain reassurance that you trust them, potentially convincing them to stay with your franchise after their initial term.

4. Prioritise Quality Over Quantity

It is good to expand your franchise network by employing the largest number of franchisees, but sometimes quality is better than quantity.  As a franchisor, you should be wary about who you invite into your franchise network. A ‘bad’ franchisee can be detrimental to your business, reputation, and franchise network. 

You should be clear on the type of person who would be suitable for your franchise network as well as your business. It is essential to have an idea of the traits you will look for when recruiting new franchisees, including: 

  • experience; 
  • financial capability; and
  • passion for your business.  

Remember to take your time and communicate with potential franchisees to get an idea of their personality and work style. Most networks have questionnaires in place to ensure the viability of potential franchisees and put them through a clear selection process before onboarding them. 

5. Provide Opportunities for Potential Franchisees to Dip Their Toes in the Water

One potential strategy to recruit excellent franchisees is to let them test the waters. This means giving them an opportunity to work in the franchise and gain first-hand experience in franchising with your network. Doing this before finalising and signing the franchise agreement would be beneficial for both you and the franchisee.

You can use this opportunity to gauge your potential franchisee’s personality and work style. This will allow you to get a better understanding of them as a person while confirming their skill set. 

6. Refine Your Website

Your website will often be the first point of contact for both customers and franchisees when researching your business. This is why it is vital to have a business website that provides clear information about your business and the products or services you provide.

It would be beneficial for your website to have a separate page for potential franchisees, like that of the careers or recruitment page for potential employees. This separate page will guide any potential franchisees in the process of franchising with you. This page should include information such as:

  • a guide to your products and services;
  • an FAQ section;
  • reviews from existing franchisees; and
  • perks of joining your franchise business.

7. Consider Brokers and Networking

There are many business brokers specialising in franchising who can assist with recruitment. In addition, events like small business and franchising expos provide excellent opportunities to network with and recruit prospective franchise partners. 

Key Takeaways

Recruiting new people to join your team can be tricky, but recruiting franchisees is very similar to the process of recruiting employees. However, it is always good to start by evaluating your current network. Once you have a list of potential franchisees, it is worth vetting them individually and potentially allowing them to get a ‘taste’ of your franchise network.  

If you are concerned about your prospects and obligations with franchising, our experienced franchise specialists can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions

How do I find potential franchisees?

It is always good to start by talking to your existing franchisees. They might have friends and family members who could be interested in joining your franchise network.

What do I need to attract potential franchisees?

It is imperative to have a franchise network of happy existing franchisees who can promote your business. In addition, having a detailed and helpful business website for potential franchisees could also attract them.

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