One of the first questions we ask new clients is to describe their ideal Franchisee. A very common response is “someone entrepreneurial” or “my clone”. While it's not completely accurate to say that entrepreneurs can't make good Franchisees, certain factors may make it more challenging for them to adapt to a Franchise model.
Here are some reasons why some entrepreneurs may struggle as Franchisees:
Entrepreneurs often have a strong desire for autonomy and independence, which tends to conflict with the standardised systems and procedures required by Franchisors. Franchises are built on established business models that must be followed closely, leaving little room for individual creativity and decision-making.
Entrepreneurs typically embrace risk and are comfortable with uncertainty. Franchising, on the other hand, offers a more structured and predictable business environment. The Franchisee must adhere to the Franchisor's guidelines and operate within the boundaries of their brand. This level of structure and conformity may be less appealing to entrepreneurs who thrive on taking risks and exploring new opportunities.
Entrepreneurs often enjoy creating new ideas, business concepts, products, or services. Franchises, however, are designed to replicate a proven business model. While there may be some room for innovation within a Franchise system, the primary focus is on consistency and replication rather than on ground-breaking ideas.
Lack of control
Franchisees must operate within the parameters the Franchisor sets, including pricing, marketing strategies, and product or service offerings. This limited control over key business decisions can be frustrating for entrepreneurs who like to have the final say in their ventures.
Franchises thrive on uniformity and consistency across multiple locations. Franchisees must follow the established systems, protocols, and brand standards of the Franchise. Entrepreneurs may find it challenging to conform to these predetermined processes, especially if they prefer forging their own path and doing things their way.
These factors don't necessarily apply to all entrepreneurs, and we have certainly seen cases where entrepreneurs have successfully transitioned into becoming Franchisees. Ultimately, however, the suitability of entrepreneurs as Franchisees depends on their willingness to adapt to the established systems and their ability to align their mindset with the requirements of a Franchise model.
New Franchisors must be careful about bringing too much entrepreneurial thinking into their Franchise network as they become established and rather, provide a structured process to allow their Franchisees to make suggestions for improvements to the systems, products or services. Encouraging Franchisees to participate strategically in the wider company objectives builds a culture of collaboration, cohesion and cooperation—key factors in any successful Franchise.