According to “Guidelines Concerning the,”(2002), franchise is a form of business in which the franchisor provides the franchisee with the rights to use a specific trademark, trade name and provides coordinated control, guidance, and support for the member’s business and its management. There are 10 attributes that must be present in a prospective franchisee for the selection by franchisor are based on an assessment of overall business experience, personal qualifications, financial capability, managerial factors, demographic factors, attitudes and personality of franchisee, and others (Jambulingam & Navin, 1999).
The first attribute that franchisee should have is the business experience in the market where they are seeking a franchise. This attribute is important because experience in managing a franchise business will derived to the succesful of franchisee. For example, the entrepreneur who want to be a franchisee in fast food business such as McDonald’s and KFC must have knowledge and experience about this type of business. They should know about the market of franchisor brand, the demand of customer of product that produce, trends and challenges in the franchise that they want to enter.
The second attribute is personal qualification of the franchisee. This attribute include academic qualification of the franchisee that related to the franchisor business. The qualification is important to ensure that the franchisee have a good knowledges and skills in managing the franchise business. For example, in order to be franchisee of McDonald’s must have knowledge of foodservice organization, fast food operations, service in fast food restaurant and other skills in dealing with customers, employees, and people that related to the business.
The third attribute is financial capabilities of the franchisee. Financial capabilities means the available of capital from franchisee in order to enter the franchise business. It also relates to the personal savings that franchisee want to invest at the first time meeting with the franchisor. This financial requirements for the franchise business is different with the types of business that franchisee wants to enter. For example, if franchisee want to joint Dunkin Donut as their franchisor, the financial start up fee is around $40000 to $80000, net worth requirement is $1.5M and cash liquidity requirement is $750K (Dunkin Donut Franchise, n.d.).
The fourth attribute is managerial factors. Managerial factors such as planning, organizing, leading and controlling the operation of the franchise are important. Franchisee should have good managerial skills in order to achieve the target or profit stated by the franchisor. It also is the best criteria for selecting the franchisee if they will managing franchise personally rather than hired other personnel to manage the operations.
The fifth criteria are demographics factors such as age, gender, ethnicity, marital status, and education. These attribute are important to determine the ability of the franchisee to do their works and getting profit to franchisor. For example, age of franchisee such as young adults will influence them in run the business for longer time frame because they have good stamina.
Attitudes of franchisee also important for run a franchise business. They should have good attitudes toward business such as punctuality, positive thinking, creative, innovative, and enthusiastic. Besides that, they were perceived innovativeness, desire for personal development, seek work-related challenges, personal commitment to the business, and business risk-taking (Jambulingam & Navin, 1999).
The personality of the franchisee also is one of the attribute that franchisor choose. The franchisee should have good personality in order to cooperate with the franchisor. The personality here means how the franchisee acts as a business people. The franchisee may demonstrate personal integrity with emphasis on interpersonal skills and communication skills that will help them to operate the business smoothly. This also helps franchisor feel confident during selection process of the franchisee.
The other attribute is the franchisee has willingness to participate in a comprehensive training program. This attributes important to develop their skills in managing the business efficiently. For example, if franchisee enter KFC franchise, so they must have the knowledge about the products, service, equipments, operation system and others skill that required to meet the standard.
Franchisee also must have a strong desire to succeed, work hard and contribute to a winning team. This is because franchisor needs their franchisee achieving certain amount of profit. To ensure it will achieve, franchisee must work hard to increase the sales and controlling cost of operation efficiently.
Last attribute is a willingness of franchisee to personally devote full-time efforts to the day-to-day operations of the business. The franchisee must always monitor and take part in the operation rather than give full of authority to their personnel. They must be the person who has active in doing their works. They must not always to feel safe because they were under a good franchisor. They must take an effective effort to be successful and gets more profit for their establishment.
Daszkowski, D. (n.d.). Dunkin’ Donuts Franchise Review. Retrieved from http://franchises.about.com/od/coffeefranchises
Guidelines concerning the franchise system under the Antimonopoly Act. (2002). Retrieved from http://www.jftc.go.jp/en/legislation
Jambulingam, T. & Nevin, J. R. (1999). Influence of franchisee selection criteria on outcomes desired by the franchisor. Journal of Business Venturing, 14, 363-395.