Being Awarded a Franchise Versus Being Sold a Franchise
If you’ve looked at franchises lately you’ve probably seen the term, being awarded a franchise. You might have scratched your head and thought, “what’s the difference between being awarded a franchise and buying a franchise?” Well, there’s a big difference!
There are two schools of thought with franchising – 1) You sell franchises to candidates or 2) You award franchises to candidates. Typically, the concepts that sell franchises to candidates do so at a fast pace. These are the brands whose focus is solely on the growth of the brand with little or no regard to the effects of this growth. You might be thinking, growth is good, right? Well, with the right kind of growth it can be very good. But, when this growth has a negative effect on the health of the brand it can go very wrong. There are brands who have learned this lesson the hard way. These are the brands that are trying to clean up the mess that bringing in subpar franchisees have caused. These are also the brands that have suffered from mistakes like cannibalization of store locations, poor marketing efforts, and some are even in the midst of legal battles with upset franchisees.
On the flip side are the concepts that award franchises. These franchises are very cognizant of the effects of their growth and will only sell franchises to those they feel will help the brand and those within it. Their franchise development team will likely spend a lot of time getting to know you, will ask a lot about you, and will work hard to help determine if their franchise is the right business for you. They typically have very happy franchisees and encourage you to have open conversation with them. They will then ask for the franchisees’ feedback on their discussions with you as they know the importance of having the right individuals in their system. When you attend a Discovery Day with this concept, it will probably be a smaller, more intimate setting rather than a large hotel ballroom gathering allowing for deeper discussions and better dialogue. These brands will sell at a deliberate pace so as to not overburden their Operations Staff, thus allowing them to fully support existing and new franchisees. This is a sign of brand focused on awarding the franchise to the right people, not just the ones with the biggest bank accounts.
So, when you are searching franchises, ask yourself “Am I being sold a franchise or awarded a franchise?” The answer might surprise you.