Franchising your business: choosing your first franchisees

Enthusiasm, available capital and a good rapport are not enough to justify choosing a franchisee. When you turn your business into a franchise network, your first partners must be able to follow the concept while running their own business. Here is how to build an evidence-based selection process, rather than one driven by the pressure to open your first franchised outlet.

1. Turn the concept’s requirements into observable criteria

Start with the work actually done in your business, not an idealised picture of an entrepreneur. What decisions does the manager make each week? Which tasks determine customer satisfaction? Which mistakes can quickly put the operation at risk?

Use these observations to draw up a selection checklist with three categories:

• Essential prerequisites: any qualifications required for the activity, availability that meets operational needs, and the ability to finance the project.
• Skills that can be learnt: using the tools, sales techniques specific to the brand, and management procedures.
• Behaviours to assess: reliability, receptiveness to feedback, keeping commitments and working with others.

For each criterion, specify the evidence you expect. “Has management skills” is too vague. “Can explain how they handled a conflict within a team” provides a basis for a concrete discussion. If your concept requires a daily presence, ask the candidate to describe their planned working arrangements and the role of any business partners.

Avoid treating your own career path as the only model. A good franchisee does not need to be like you; they need the capabilities required to operate the concept.

2. Create a two-way selection process

Use the same process for all candidates, with clearly defined stages and people responsible for each. This makes comparisons easier and reduces the risk of decisions based on a favourable first impression.

Begin with an initial screening interview covering motivation, experience, availability, understanding of the role and access to resources. Follow this with an in-depth interview based on real experiences. Ask what the person decided, why and with what outcome, rather than what they would do in an ideal world.

An observation visit to your premises can then reveal the realities of the role: operating hours, quality requirements, customer interactions and management constraints. Show candidates the less appealing tasks too. This visit must not turn into a day of unpaid productive work; any actual work requires an appropriate legal framework.

Finally, set a hypothetical practical exercise: an absent employee, several complaints and a delayed delivery. Ask the candidate to prioritise their actions. Assess their reasoning against a prepared scoring framework, without expecting knowledge of procedures they have not yet learnt.

Give candidates the opportunity to assess you too. Questions about the constraints of the concept and each party’s responsibilities often signal a serious approach.

3. Check their ability to run a business within a shared framework

Franchising brings independent business owners together around a shared concept. You therefore need to look for two complementary qualities: the ability to manage independently and a willingness to follow the brand’s standards.

Test this balance explicitly. How would the candidate respond to a procedure they thought could be improved? A constructive response would be to follow it within the agreed framework, then propose a well-reasoned improvement. By contrast, wanting to change everything immediately or expecting the franchisor to make every day-to-day decision warrants further exploration.

When assessing funding, distinguish between stated resources and funds that are actually available. Request proportionate supporting evidence and clarify any conditions attached to the funds: a loan that is not yet confirmed, a business partner who has not committed, or a capital contribution dependent on a sale. This check does not replace a bank’s assessment or advice from a qualified accountant.

Collect only the data needed for the assessment. The General Data Protection Regulation, or GDPR, requires, among other things, a defined purpose, appropriate information for the individuals concerned, limited retention periods and secure access. Avoid intrusive questions unrelated to the project.

4. Document the decision without rushing into a commitment

After each stage, record the facts observed, any concerns and the checks still required. Use three possible outcomes: proceed, investigate further or stop. An overall positive assessment must not obscure an unmet essential prerequisite.

In France, there is no single statutory framework governing the entire franchise relationship. General contract law applies, including the obligation to act in good faith during negotiations.

Article L. 330-3 of the French Commercial Code, introduced by the Doubin Law of 31 December 1989, governs pre-contractual disclosure where a trade mark, trading identity or trade name is made available in return for an exclusive or near-exclusive commitment in carrying on the business. The pre-contractual disclosure document, known in France as the DIP, whose contents are specified in Article R. 330-1, and the draft contract must be provided at least twenty days before signing or, where applicable, before any required advance payment. A successful selection outcome does not allow this period to be shortened.

Key takeaway: before meeting your next candidates, prepare a criteria checklist, a practical exercise and a decision framework. It is better to delay an opening than to choose a partner whose incompatibilities are already apparent.