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Traits of a Successful Franchisee

News, Articles, Success Stories and Advice on Franchising
Traits of a Successful Franchisee

Traits of a Successful Franchisee

What if you want your franchise to do more than just survive – but be a top performer within your franchise system? That may take more than just following the proven model. Although most franchises have a proven business model in place, the only thing that really guarantees success is attitude. Most franchisors agree that to outperform their peers, a franchisee needs to have something extra. He or she needs to have some

  • entrepreneurial skills,
  • combined with quality management and
  • people skills.

There are traits of successful franchisees which one can follow should they wish to be a top earner, as opposed to simply making a living, or even failing.

That something extra

Good_Better_Best_Sign1. Yes, there’s the proven and successful model, but do it better. Add an extra twist. A successful franchisee will provide not just good customer service, but the best. They care that little bit more than others about their brand, they continually innovate their marketing, and often live their business.

2. If you’re the sort of person prepared to socialise wearing a t-shirt branded with your business logo – you may be the sort of business owner who can outshine your fellow franchisees. And yes, that actually can bring in new customers.

customer-complaint-management3. A good franchisee will spend more time on customer service than anything else, always taking extreme care to resolve any customer complaints immediately. In fact, one key indicator of a franchisee is the absence of customer complaints lodged with head office.


4. They recognise the importance of communication: the good franchisee maintains regular lines of communication with the:

  • franchisor,
  • suppliers,
  • staff and
  • customers.

Excellent communication skills are an essential element of a successful franchise operation.

The hard issues

Working capital1. Working capital has to be jealously guarded. Too many failed franchisees simply ran out of working capital. This often occurs at the commencement of a start-up franchise. The new franchisee is super enthusiastic and wants to kit the store out with state-of-the-art equipment or fittings that the turnover of the business simply doesn’t justify. If it’s a turnkey franchise, then you can be assured the equipment provided is suitable for the business until revenue increases. Only when the existing operation is showing clear signs of inadequacy, should capital be spent on additional equipment or staff.

Do not spend money on equipment or staff until you actually need it. But when you do need it, spend that capital as urgently as possible.

2. Ado-not-overspendnother issue that could drain money out of the business is personal overspending.  Many new franchisees are too enthusiastic about drawing money out of the business for their own expenses, especially if the franchise is cash rich. Remember that you have to budget and plan ahead to pay creditors, staff and taxes. Work with your accountant to determine an appropriate salary for yourself and when it is prudent to draw a dividend.

How to manage staff

The manner in which franchisees manage staff is another contributor to the success or mediocrity of the store.

job-security1. Staff don’t expect the franchisee to make friends with them, or necessarily incentivise them. What they really want is job security.

  • They see job security when the store is regularly busy.
  • They also like to be treated decently and always paid on time.
  • An important aspect of job satisfaction is investing in their training. It creates a cooperative team spirit. A common indicator of a poor franchisee is that they find training staff a chore.

2. Also, lead by example: be prepared to do whatever it takes to get the job done — willingly and with an enthusiastic attitude — and employees will often follow suit.

  • lead by examplePut people first.
  • An outstanding franchisee is one who is in the store at all times, conscious of all that is happening on the floor, including
    • staff morale,
    • who will always be ready to chat to a supplier to see if a better deal can be negotiated.
  • He or she generally anticipates problems before they materialise.
  • They also take responsibility for errors, rather than blame employees.

A good franchisee is always aware of the staffing hierarchy. To retain his focus on the important aspects of the business, such as turnover and profitability, the franchisee should be willing to delegate work wherever possible. This helps foster effective relationships between staff and franchise owner.

Manage for success

managementA competent franchisee works only with the best stock and closely and personally manages that stock – as more franchises have failed due to pilferage (theft) and stock waste than probably any other cause. They will also call in the franchisor when it comes to the bigger overheads such as rent. Franchisors have leverage that a small business owner does not, and should be involved in landlord negotiations wherever possible.

Follow the rules: every great franchise opportunity has a tested and proven system of operations.

Finally, a good franchisee understands nobody will care about their business as well as they can, and they generally are on top of every aspect of the business.

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