Mismatch in franchise industry could be a fatal to business success
Three pillars which prospective franchisees must consider
Comprising of 11% of the total South African GDP, the franchising industry has become a well regulated sector in the past few years that cannot be ignored. According to Gerrie van Biljon, Executive Director of Business Partners, the industry growth has encouraged many entrepreneurs to explore the opportunities that the sector has to offer.
He says that however, due to the many types of businesses which operate within the sector, should franchisees want to thrive, they need to ensure that their personalities and skills set are suited to the type of business they are looking to partner with.
“Don’t buy a restaurant franchise if you like to go to sleep early,” says van Biljon. He says that although this may seem obvious, he is often surprised by how many first-time franchisees make the mistake of buying a franchise that simply does not fit their lifestyles.
“In the world of start-up franchising, it can easily be a fatal mistake to make because there is so little room for error. Very few people who buy their first franchise have the resources for a second chance once they’ve found out that the franchise they had set their heart on is actually not the right fit.”
He says that lifestyle preference is only one of three pillars which prospective franchisees must consider to make sure that the franchise they choose is the right fit for them. The other two are skills and personality.
“The skills set of the entrepreneur is the most important. Firstly, there is the technical know-how related to the specific industry, such as a beauty salon or a service station. Entrepreneurs should choose a franchise for which they either have a natural skills set, or one in which they have had previous experience in.”
Van Biljon says that irrespective of the industry, a franchisee will always have to be a jack-of-all-trades to a certain extent. “It is important to possess a good general hybrid of skills as often the franchisee is expected to fill the human resources role, the sales role, the office-manager role and be the tea lady.”
He says that franchisees should possess the following skills set in order to run a successful business:
- Good management ability, which is the core of what the franchisee is signing up for;
- Sales skills – This is because the whole enterprise revolves around the franchisee’s ability to secure business;
- An eye for detail and practical problem solving skills. Because the business owner will be fulfilling multiple tasks within the business, he or she should know as much about all the different systems as possible;
- Networking and relationship-building skills for forging ties with clients, staff, suppliers and franchisor, and
- Practical problem-solving skills as business owners are faced with many challenges every day.
This list is true for any start-up business, franchised or not, says van Biljon, but there is one set of skills particular to franchising – the ability to follow the rules of the concept. “Franchising is a recipe that requires strict adherence by franchisees, otherwise the service or product will start differing from branch to branch, and the collective power of the brand will suffer. If the franchisee is not somebody who likes to operate under a strict set of rules, then franchising may not be the correct career path.”
He says that being a successful franchisee not only has to do with skills, but also with personality. “Prospective franchisees need to be honest with themselves about their personality. For example, a generally introverted person should shy from retail or service-heavy businesses such as restaurants. Similarly, a sociable, outgoing personality will become frustrated in a desk-bound business where there is little interaction with clients.
“Although nothing can replace common-sense self-knowledge, conducting a personality test such as the Myers Briggs test may assist in processing what individuals already know about themselves. However, the unknown usually lies on the side of the franchise, and a first-time franchisee who knows himself well could still be in for a nasty surprise when it turns out that the franchise requires an approach, attitude or trait the owner simply isn’t comfortable with.”
Van Biljon suggests two complementary methods of avoiding this mistake. “First, potential franchisees are advised to speak to the franchisor that they are interested in. A reputable, established franchise group will have a very clear idea of what kind of personality and skills set are required to make a success of their concept. Some will even have formal descriptions and tests as part of their assessment process.
“Most importantly, it is advisable that franchisees in the group are also consulted as part of the process. This exercise should leave possible franchisees with an opinion about whether they are up to the task, and whether the work and lifestyle is suited to their aspirations,” concludes van Biljon.