Recruit your first franchisee with clear selection criteria

When an established business expands through franchising, recruiting the first franchisee is particularly important. An enthusiastic customer or skilled employee is not automatically the right person to run the business. You need to assess both their ability to operate an independent business and their willingness to contribute to a franchise network. A clear selection process also helps candidates decide whether the partnership is right for them.

1. Define the role before looking for candidates

Start with what the franchisee will actually need to do in a typical working week. Distinguish between customer-facing work, sales, staff management, administration and monitoring financial performance. If the concept requires the owner to work actively in the business, make that clear from the outset.

Then divide your selection criteria into three categories:

• Essential from the start: experience or skills that your organisation cannot teach, or does not have time to teach, before opening.
• Can be learnt: concept-specific procedures, product ranges and tools covered during induction.
• Approach: how the candidate takes responsibility, handles feedback and works within a shared framework.

Avoid vague requirements such as ‘entrepreneurial’ and ‘sociable’. Instead, describe observable behaviours, such as following up quotations, planning staffing levels or spotting discrepancies in a monthly report.

For your first franchisee, you also need to make clear what is still being developed. Do not look for someone expected to compensate for an unfinished concept by putting in unlimited work of their own. Candidates should understand what structure and support are actually in place.

2. Assess everyone consistently

Decide on the selection process before applications arrive. A straightforward sequence is an initial conversation, a structured interview, a site visit, a practical exercise and reference checks. Include clear decision points so that nobody progresses simply because considerable time has already been invested.

Ask every candidate the same core questions. Request concrete examples:

• When have you had to follow a shared procedure that you wanted to change?
• How have you handled a period of weak sales?
• How did you last identify and correct a financial error?
• When have you asked for help before a problem became serious?

Assess answers against the selection criteria, not against how much the candidate resembles you. Record what the person actually tells you and what needs to be verified. If several people conduct interviews, they should make their own assessments first, then compare them.

Also decide which shortcomings rule a candidate out and which can be addressed through a specific development plan. A good personal rapport should not outweigh uncertain funding arrangements or an unwillingness to follow core procedures.

3. Test everyday decisions, not presentation skills

A short practical exercise can provide better evidence than another sales-focused meeting. Use an anonymised or fictional scenario from your business. For example, ask the candidate to prioritise a customer complaint, a staff member calling in sick and a delayed delivery.

Ask them to explain what information is missing, what needs immediate action and when the franchisor should be contacted. Assess their reasoning rather than whether they already know your internal procedures. The exercise should test judgement and the ability to learn, not knowledge that your induction should provide.

Also ask the candidate to review a simplified financial report and formulate questions. The aim is not to test advanced accounting skills, but to see whether they understand the relationship between sales, costs and available cash.

Present the exercise as part of the selection process. Do not use it as unpaid productive work in your day-to-day operations.

4. Check practical requirements while respecting privacy

Seek references from people who can describe the candidate’s sense of responsibility, ability to work with others and financial discipline. Ask about situations and actions rather than general opinions. Agree with the candidate whom you may contact.

Check that the funding plan is concrete too. Distinguish between available personal funds, approved finance and hopes of securing future loans. Ask candidates to explain how they will support themselves during the start-up phase, without requesting more personal information than the assessment requires.

Applications, interview notes and reference information are subject to data protection rules. Define the purpose, lawful basis, access arrangements and retention and deletion policies in accordance with the GDPR. Inform candidates how their information will be handled, and avoid collecting sensitive or irrelevant details ‘just in case’.

5. Let candidates make an independent decision

Recruitment is a mutual selection process, not a race to secure a signature. Franchisees run their own businesses within the franchise network and need to be able to assess both their obligations and the risks.

In Sweden, Act (2006:484) on Franchisors’ Duty to Provide Information applies. It requires franchisors to provide clear, comprehensible written information well before the agreement is concluded. The Act does not specify a general 14-day disclosure period. Plan the selection process so that candidates have a genuine opportunity to review the terms and consult independent advisers.

Do not let a successful selection outcome appear to guarantee profitability. Instead, conclude with a joint review of outstanding questions and document why you choose to proceed or withdraw.

Practical takeaway: Write the selection criteria first, test the same abilities in every candidate and give candidates room to say no. A well-founded selection process builds a stronger franchise network than a quick signature.