To be successful in any business, operators strive for a win-win result: for themselves and for consumers. But franchised businesses are obliged to go beyond the ordinary two-win situation.
Four parties – franchisees, consumers, the government and franchisors themselves – all need to win for a franchise to succeed, says Albert Kong, a certified management consultant and the CEO of Singapore-based Asiawide Franchise Consultants.
For this reason, it’s essential that the two main players, the franchisor and franchisee, are comfortable about doing business together. Are they knowledgeable enough to undertake the venture? Is the business financially sound and investment-worthy? Does the franchisee have the background and experience to run the business? Do the two sides’ natures and personalities match the venture?
Mr Kong advises franchisors to ensure that prospective franchisees submit detailed business plans as a way of gauging whether they have what it takes to run the venture. Picking the wrong franchisees can damage a franchisor’s business and destroy the value or a carefully nurtured brand.
For prospective franchisees, Mr Kong suggests evaluating readiness based on the eight C’s, as follows:
- Concept/core values: Is the concept of the businesses applicable to your country, government policies, laws and regulations, culture, religion, community and life styles? One concept may fit one culture but not another.
- Character: Are you genuinely interested in the business? People usually do better at things they like and are passionate about.
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