Choosing franchisees: build an assessment framework

When you turn your existing business into a franchise network, your choice of the first franchisees shapes how the whole network operates. A strong candidate is not necessarily the most experienced salesperson or the most enthusiastic admirer of your brand. You need a partner who can run their own business, bear the commercial risks and follow a shared business model. A written assessment framework helps you select candidates on evidence, rather than personal chemistry alone.

1. Base your selection criteria on the day-to-day running of your business

Start by listing what a franchisee needs to do in a typical working week. Will they attend client meetings themselves, supervise employees, plan shifts or take responsibility for local sales? Do not build the candidate profile around your own personality. Your business can succeed with a different management style, provided the critical tasks are handled properly.

Separate your criteria into three groups:

• Essential prerequisites: the skills required for the role, any necessary personal qualifications and a realistic ability to secure funding.
• Skills that can be taught: the network’s systems, service delivery process, product knowledge and shared operating procedures.
• Ability to work in partnership: accepting feedback, raising problems and a willingness to follow agreed quality standards.

Write a justification beside each requirement. If you cannot link a requirement to the franchisee’s role, reconsider whether it is necessary. Extensive experience in a similar business, for example, does not in itself demonstrate an ability to manage staff or learn a new business model.

Also define what would rule out a candidate. A lack of familiarity with your systems may be a training issue, but an unwillingness to accept shared operating procedures poses a more fundamental risk to the partnership.

2. Use consistent questions and practical exercises

Suomi.fi, Finland’s public service portal, describes the franchisee application process as a series of stages in which both parties get to know each other. As the network’s founder, you can make this systematic by using the same interview structure for every candidate. You can ask follow-up questions, but the core assessment should remain consistent.

Ask for examples of what candidates have actually done. A question such as “Are you a good manager?” can easily produce a general assurance. Instead, ask how the candidate addressed a recurring mistake at work, what action they took and what happened as a result. Experience gained outside business ownership can also demonstrate the capabilities you need.

Use a hypothetical decision-making exercise: an outlet’s sales are below target, staff shifts have already been agreed and customer feedback is deteriorating. Ask the candidate what they would investigate first and at what point they would seek help from the network. The aim is not to find one correct answer, but to see whether their decisions are based on information or assumptions.

Give all candidates the same background information needed for the exercise. Do not assess them on network-specific knowledge they have not yet been taught. Keep the exercise limited in scope: a selection task should not turn into unpaid client work carried out by the candidate.

3. Make sure the candidate understands the franchisee’s role

A franchise network provides the business model and agreed support, but each franchisee is responsible for their own business’s obligations and commercial risks. Suomi.fi also stresses the franchisee’s responsibility for setting up the business and securing funding. Understanding this distinction is an important selection criterion.

Ask candidates to explain in their own words which decisions are theirs to make and where they must follow the shared model. In particular, discuss how they would respond if an improvement they proposed did not fit the franchise concept. A good partner can challenge constructively without unilaterally changing agreed practices.

Discuss their expectations of support from the network too. If a candidate assumes the network will bring in every customer or solve every staffing problem, correct those expectations before making your selection. Then ask them to reassess their interest.

Give candidates room to interview you as well. Questions about how your support works in practice and the weaknesses of the business model are not a negative sign. They may show careful preparation for a long-term partnership.

4. Understand the legal boundaries of selection in Finland

Finland has no specific franchising act and no regulatory approval procedure for selecting franchisees. Nor is there a separate statutory pre-contractual disclosure procedure for franchising. This does not diminish the importance of generally applicable legislation during recruitment and contract negotiations.

Finland’s Unfair Business Practices Act prohibits false or misleading statements that may affect demand for or the supply of goods or services. Do not try to persuade a suitable candidate to commit by exaggerating the business model’s results or downplaying the franchisee’s responsibilities. The Contracts Act governs the formation and validity of contracts; section 36 allows unreasonable contractual terms to be adjusted.

The prohibitions on discrimination in the Non-Discrimination Act must also be taken into account. Base your selection criteria on genuine business requirements, rather than, for example, a candidate’s origin or family circumstances. The EU General Data Protection Regulation and Finland’s Data Protection Act apply to the processing of candidate data.

The Finnish Franchising Association’s Code of Ethics is a form of self-regulation, not legislation. It binds the association’s members and provides a useful benchmark for responsible partnerships more widely. Selecting a franchisee is not, in itself, employee recruitment: it is preparation for a partnership between independent businesses.

5. Decide on the evidence and record outstanding questions

Bring your observations together in an assessment table. For each key criterion, record whether the capability has been demonstrated, still needs to be verified or can be developed through training. Add a brief justification, such as a situation the candidate described or an approach they took during the exercise. Avoid vague descriptions such as “does not seem like the entrepreneurial type”.

If possible, use two assessors. Record your observations separately before discussing them. This makes it less likely that a strong first impression will steer the entire decision. Do not let an overall score conceal a significant weakness: strong sales skills do not compensate for an unrealistic understanding of business risk.

Finally, decide whether to proceed, seek further information or end the discussions. Communicate the decision professionally and make clear that progressing to the next stage is not the same as entering into a binding contract.

Practical summary: before the first interview, create a one-page assessment template containing role-specific criteria, standard questions and grounds for ruling out a candidate. Use it for every candidate and refine the framework as you gain experience.