Corven on Women and the Franchise Recruitment Process March08 · franchise recruitment process and...
Transcript of Corven on Women and the Franchise Recruitment Process March08 · franchise recruitment process and...
Report Women in Franchising: Franchise Recruitment Process A preliminary study on how women interact with the franchise recruitment process.
March 2008
© Corven Pty Ltd: March 2008 PAGE 2
No part of this paper is to be reproduced without the express permission of the author.
ABSTRACT
Purpose
Fact or fiction? Women significantly influence many major life decisions:
buying a car, a house, getting married (or not), having a child. There is a
wealth of information and research indicates that this is ‘fact’.
Buying a franchised business would be considered a major life decision. It’s
logical to think that buying a franchise will be subjected to some ‘feminine
think time’.
So, how do women influence the purchase of a franchised business?
A preliminary study conducted by Corven set out to identify unique factors
and common themes attributed to women as they interact with the
franchise recruitment process and conduct due diligence.
The franchise recruitment process refers to the process or steps involved in
which Franchisees are granted the right to own a franchised business. Attracting,
retaining and assessing prospective Franchisees and mutual due diligence
activities form part of this process.
Current information available on how women interact with the franchise
recruitment process appears to be random and based on anecdotal
evidence. This paper will reference current thinking and incorporate this
information.
Educational Application
The findings from this study may assist women (and men) develop an
understanding of the franchise recruitment process, how women interact
with the process and how due diligence activities and decision making may
be enhanced.
It may also assist franchisors in understanding why women interact the way
they do during the franchise recruitment process, and provide direction on
how to evolve current franchise recruitment practices.
Predictions and Insights
The study aimed to test the hypothesis that there are unique factors and
themes attributed to women as they engage in the franchise recruitment
process.
The results suggest, even in their preliminary form, that areas of
commonality unique to women are:
o The perception of being risk averse;
o Research and detail orientation;
o Due diligence focus and current competency assessment; and
o Collaborative decision making processes.
Scope and Methodology
Corven’s study was conducted from October to December 2007, with a
relatively small sample size of prospective and current female franchisees
(32 participants). The rationale behind this was to test the hypothesis before
commencing broader research activities.
In addition, interviews with franchisors and professionals working in the
field of franchise recruitment and selection were conducted.
INTRODUCTION
Before discussing the preliminary findings, some information on why
women are considering franchising, motivating factors and barriers to entry.
© Corven Pty Ltd: March 2008 PAGE 3
No part of this paper is to be reproduced without the express permission of the author.
Why are women considering franchising?
There are a myriad of reasons that may prompt women to consider
franchising, such as;
o Seeking an appropriate investment that will provide personal wealth
and independence;
o Not achieving full potential in their current careers;
o Hitting career barriers or perceiving a ‘glass ceiling’ in a current role;
o Lack of workplace flexibility; through to
o Someone wants to go into business with them.
“Women buy franchises for a myriad of reasons. They look for financial
independence or a flexible schedule. They want to spread their entrepreneurial
wings. Or they may be following a spouse into the business. But there is an
emotional component that men don’t always have” (Ray, 2006: 27)
Regardless of the reason, three broad categories of ‘women as franchisees’
have emerged: investors, partners and accidental franchisees. Let’s discuss.
There are some women who will consider franchising as an investment
opportunity. They consider the proposition from a solely/purely commercial
perspective and will have very clear goals about what the business needs to
deliver. They know what the business looks like the day they sell it. They will
only consider franchises that will realise a sound return on investment and
provide the lifestyle they are seeking.
We have women who enter into partnerships, with their spouse or life-
partner, sibling, relative or friend. These women take an existing emotional
relationship and extend it into a commercial relationship.
Finally, and more interestingly, we have what Corven has termed the
‘accidental franchisee’. The accidental franchisee is often the female in a
relationship, where the spouse bought a franchise.
She may not have been part of the franchise recruitment process, she may
not have attended the start-up training and she may not have been involved
in the running of the business from the beginning.
However, there comes a time when that changes. Her involvement in the
business starts at home, when the spouse comes home and talks about their
day. She shares her opinion on business operations and management as she
‘accidentally’ learns about the franchise.
She may start to become more involved in the business, conducting
operational or management functions such as bookkeeping, administration
and human resource management. In most cases, she’s probably doing all of
this without formal training and ‘accidentally’, not adhering to franchise
standards and processes.
As time moves on, her engagement in the business increases and this spills
over into broader involvement in franchise activities (such as meetings,
events and conferences). She is influential – her skill sets may complement
or exceed her spouses, and she has her own opinions of the franchise. She
has ‘accidentally’ become a franchisee.
All three of these categories exist and they will approach the franchise
recruitment process in different ways.
Female Franchise Factors
What is it about franchising and franchised businesses that women are
attracted to?
85 percent of the prospective female franchisees surveyed indicated they
were motivated to consider a franchise because it would provide them with
a proven business system with support and tools; provide an instant
network and brand strength that may increase their chance of success.
Subsidiary motivating factors included the type of business, the location of
the business and the sense of ownership derived from being a franchisee.
© Corven Pty Ltd: March 2008 PAGE 4
No part of this paper is to be reproduced without the express permission of the author.
“Franchising offers women a safer alternative. It combines the flexibility and
creativity of a smaller business with the assurance and efficiency of a larger
organisation” (Women and Franchising – A Successful Combination, 2007)
Current female franchisees recall being in love with the brand, the security
of the brand in the marketplace and the fact that they could buy a business
and learn an industry from top to bottom as additional motivational factors.
Key franchising factors that appeal to women:
o Franchising has built in support systems with proven business methods
and tools.
o Franchisees have full responsibility for the growth of the business, with
lower risk of failure.
o Franchisees inherit an instant network of support. Networking and
support networks are not wholly the domain of women – indeed, men
require the same.
“Networking will allow individuals who have a franchise, or are thinking about
buying one, to share ideas, advice and experiences. By communicating with each
other you will be able to focus on the key issues they face in business” (Women
and Networking, 2007)
There’s nothing new about these results. They highlight the power of good
franchising. But do they indicate different motivating factors for women?
In a recent study on the predictors of franchisee performance, Greg Nathan
of the Franchise Relationships Institute found significant gender differences
in the reasons why franchisees choose a career in franchising.
Nathan’s study determined that while females are more likely to be
motivated by achieving a personal challenge, males are more likely to be
motivated by having more control over how they do things.
"We found that male franchisees who were mainly motivated by having
more control were more likely to perform better in a franchised business
while female franchisees who were mainly motivated to achieve a personal
challenge were also more likely to succeed.
On the other hand, female franchisees who said they are primarily
motivated to have more security and stability or to work with their
family were more likely to be worse performers," says Nathan.
Challenges of business entry
Recent studies estimate that the Australian franchise sector consists of
around 960 business format franchise systems and approximately 56,200
franchised units. (Griffith University (2006) Franchising Australia)
10.9 percent of these franchised units are independently owned by women:
significantly less than the reported 33 percent of female owned
independent small businesses. (Australian Bureau of Statistics (2004) Study 8127.0
Characteristics of Small Business)
Commentary around women being ultra-conservative and risk-averse,
having limited access to start up capital and having underdeveloped
competencies around financial management, analysis and strategic intent,
are incongruent with the Australian experience and these statistics.
Women appear to be taking risks, sourcing funds and developing business
management competencies - just not with franchised businesses. They
appear to be choosing independent small business opportunities over
franchising.
© Corven Pty Ltd: March 2008 PAGE 5
No part of this paper is to be reproduced without the express permission of the author.
Questions arising from these statistics and the current situation of female
franchise ownership in Australia compared with independent small business
ownership:
o Are women discounting or rejecting franchising as a viable business
proposition?
o Are women aware of the benefits of franchising over independent small
business ownership?
o Does the franchise recruitment process prevent women from becoming
franchisees?
This introductory discussion highlights the current situation of women in
franchising in Australia.
STUDY RESULTS
Scope and Methodology
This study aimed to identify themes and factors unique to women engaged
in the franchise recruitment process, not to conduct a broader comparative
piece on men versus women.
Together with research partner, Franchise Selection (a Melbourne-based
franchisee recruitment firm) a paper based questionnaire was designed for
prospective franchisees and distributed directly to women engaged in the
recruitment process.
Interviews were conducted with existing female franchisees, as well as with
franchisor staff and professionals working in the field of franchise
recruitment and selection.
The results are not entirely conclusive but do indicate that areas of
commonality may exist, the perception of being risk-averse; research and
detail orientation, due diligence focus and competency assessment, and
collaborative decision making processes.
Results and comments sourced during the study form the basis of this
discussion on how women interact with the franchise recruitment process.
Prospective Franchisee Profile
The prospective franchisees who participated in the study were:
o Women between the ages of 32 and 52 years.
o Predominantly going into partnership. Eighty percent were entering
into partnership with their spouse. Twenty percent were going into
business on their own.
Please consider the profile of the study participants when interpreting the
results and discussion.
Current Female Franchisees
The current female franchisees that were interviewed were asked to reflect
their interaction in the franchise recruitment process.
DISCUSSION
Overview
This section of the paper is an opportunity to ground the responses and
results (including commentary from franchisor personnel and experts in the
field of franchise recruitment) into the key findings of the study.
© Corven Pty Ltd: March 2008 PAGE 6
No part of this paper is to be reproduced without the express permission of the author.
The discussion will commence with some comments on women and lead
generation. Throughout the course of the study, unsought but relevant
information surfaced relating to how to attract women to a franchise
business opportunity.
Women and Lead Generation
Women wanting to be franchisees will be attracted to a franchise for a
variety of reasons. Franchisors need to consider how they promote their
franchise opportunity to women, as opposed to how they market their
products and services to consumers.
Not all women are in relationships or parents, so they may not connect with
images of happy mothers and families.
Not all women connect with images of female models, especially if they
don’t remotely reflect the image of current franchisees.
Contrary to expectations, many women do not connect with the feminine
colour of pink.
Selected marketing tactics may intend to communicate with prospective
franchisees that this is the system they are looking for but they may also
alienate a highly qualified prospective female franchisee.
Recent studies in Australia found that the most effective marketing
mediums expected to attract female franchisees were:
o Internet (30%)
o Word of mouth (28%)
o Magazines (13%)
o Newspapers (11%)
o Public relations (11%)
(10 Thousand Feet (2007) Franchisor Expansion Study)
Anecdotal evidence from the USA indicates printed media and public
relation activity generates quality female leads. Women respond positively
to case study stories about how other women have achieved success
through franchising.
Editorial, rather than advertising, appeared to be more effective lending
itself to the development of franchisee role models that women connect
with and aspire to be like.
Finding #1 –
The Perception of Being Risk-Averse
Women are cautious when commencing the franchise recruitment process.
Women may act as the ‘asset protector’ protecting their current lifestyle;
personal and/or family situation and assets. Women will not give these up
for a business that can’t prove itself.
Are women ridiculously risk-averse? No. Cautious? Yes. Risk-averse? No.
Women will buy a franchise as long as their areas of concern are adequately
addressed during the franchise recruitment process.
The more information women have, the more satisfied they will be with
their decision.
Prospective female franchisees in the study identified their key areas of
concerns as:
o Paying the business loan back quickly;
o Selling the business in the future;
o Handling the possible loss of independence by having to follow a
system;
o Ensuring that partners and family are supportive, and
o Hoping that a good relationship exists between the franchisor and
franchisees.
© Corven Pty Ltd: March 2008 PAGE 7
No part of this paper is to be reproduced without the express permission of the author.
These concerns drive prospective franchisees during their due diligence
activities.
Finding #2 –
Research and Detail Orientation
Women tend to be well prepared, having conducted considerable research
on the business and more than likely, having created financial worst case
scenarios.
However, if women can’t source the information they need or franchisors
are not prepared to provide requested information, women will tend slow
down the franchise recruitment process in favour of greater due diligence,
consideration and collaboration.
“Follow up is meticulous, sometimes to the extreme, and this can make the
process a slow one, but once committed women will tend to move quickly to
make things happen.” Franchisor comment.
Some of the franchisors interviewed observed that on numerous occasions
women are exceptional well prepared for the first face-to-face meeting,
having completed detailed research with questions already written down.
Pulling Trouble’s Tail – Part One
Trouble. It lies there and waits to be provoked.
Anecdotal evidence indicates that if a woman doesn’t like or respect the person
managing the recruitment process, they are more than likely to cease proceedings
(or their involvement in the process), or heavily influence their spouse not to
continue.
One of the franchisors interviewed viewed franchise recruitment less as a selling
process, and more as the development of an ongoing business partnership –
“Women are not afraid of commitment and we need to see the kind of relationship
we are getting into., Therefore, we place a high value on building a long term
relationship and that starts from the recruitment process.”
Another franchisor mentioned that dangerous assumptions made by foolish
franchisors easily turn women away – “Assumptions that make fools of franchisors
range from assuming that the male partner is to have an active role in the business;
that the female partner is the primary care giver for any children; that the
prospective franchisee has a partner or that their partner is male, through to
assuming (or even prescribing) what the prospective female franchisees business
goals, lifestyle expectations and business ambitions are.”
Another franchisor agreed, saying women “tend to care about not simply the
business side of the franchise, but the human side – how am I being treated as a
prospective business partner? How much do they really understand about me, my
needs and my situation?”
Finding #3 –
Due Diligence Focus
& Competency Assessment
Due Diligence Focus
What are women collecting evidence of, researching and conducting due
diligence on?
“Women tend to base their research on the aspects of the system most
important to them. Women are more ‘big picture’ focused and are more
curious as to the potential of the system, what they can achieve with the
right approach” a participating franchisor concluded.
Due diligence refers to the activities that both prospective franchisees and
franchisors conduct on the business opportunity and on the people they are
getting into business with. It refers to the information gathered and advice sort to
assist either party with making a sound, viable decision.
© Corven Pty Ltd: March 2008 PAGE 8
No part of this paper is to be reproduced without the express permission of the author.
The following questions appear to be more commonly asked by women,
than men:
o Where will the franchise be in five years time?
o What plans are in place now for product and service innovation?
o How will you help me grow and sell my business?
o Will it provide me with the income and lifestyle I seek?
o Will I be challenged and learn something new?
o Will I enjoy it?
o Do I like these people?
The prospective franchisees surveyed indicated they were asking questions
such as:
o Can you provide me with details relating to the franchise structure,
current model and how it was developed?
o Can you share with me the strategic direction the franchise plans to
focus on over the next 5 to 10 years?
o How do you determine a ‘successful franchisee’ in your system? Who
are they and what did they do to become successful?
o What information do you have relating to finances and the return on
investment franchisees have achieved?
o What support and business tools do you, the franchisor, offer? How are
you going to help me achieve my business goals?
o Can you show me the data and research on the demographic and other
issues that determined how the franchise location and/or territory were
selected?
When asked if they could have their time again, the current franchisees
interviewed mentioned the following:
o “I did a lot of due diligence, however I have still made mistakes and
from this I have learned a lot. I would go over the lease with a finer
tooth comb. Ask more questions about tenancy and tenant rights.”
o “I would be more clinical and not so emotional about the decision, as I
think your emotions help make decisions without the full thought
process of consequences.”
o “I would spend more time on asking specific questions relating to entry
and ongoing costs pertaining to the business and lifestyle
considerations, such as time away from the business and franchisee
earnings.”
It appears that due diligence is personal, and directly related to the
prospective franchisees goals, motivation and current situation.
However, evidence suggests that women tend to consistently ask questions
around the current franchise system offer; franchisee success and how to
achieve it; the future and potential of the business; financial aspects and
how to achieve return on investment and specific data relating to the
location of the business.
Current Competency Assessment
Women appear to analyse their current competencies and capabilities far
quicker than men.
‘Feminine’ competencies of relationship-orientation; organisation; multi-
tasking and people management appear to be current capabilities in most
women. This is supported by Nathan's research, where it was found that
women franchisees perform significantly better than men, especially on
measures of customer service and constructive participation in the franchise
network.
However, ‘masculine’ competencies, such as problem solving; speedy
decision making; achievement-orientation and tenacity may be required for
business success and women will look to see how these will be developed
through training provided by the franchise.
© Corven Pty Ltd: March 2008 PAGE 9
No part of this paper is to be reproduced without the express permission of the author.
Feminine Competencies and Franchise Success
Women tend to be good listeners and build lasting relationships more easily, which
are fundamental requirements of franchising.
Prioritising and being detail-oriented are other characteristics of women that make
them ideal for franchising. As are placing greater emphasis on such skills as being
organised and having the ability to handle numerous tasks.
(The Time is Right for Women in Franchising, 2007)
A franchisor went on to suggest that it’s very important for women to
critique their own attributes. “What skills and attributes can you readily
contribute to your new venture and which ones genuinely need
improvement? If your franchise is going be a partnership, say a husband and
wife team, you should carefully consider the pros and cons of this
arrangement.”
This point was picked up by another franchisor, who believes that women
should be encouraged to clearly identify their strengths and weaknesses and
consider how they can leverage off the strengths a business partner may
bring, or the business tools of the franchise system.
“Women tend to be naturals at rapport building, organisation, multi-tasking
and people management. A question I always pose and assess for is tenacity
– how do you work through tough times and crisis?”
Family Friendly Franchises
Another trend that is beginning to get some traction is ‘family friendly
franchises’ – how franchisors support female franchisees who have families
or are considering starting one.
A franchisor recommended that women should consider how the franchise
opportunity will provide the lifestyle and flexibility they might be looking
for. “If you’re considering your family or starting one, how does the
franchise support this?”
As an extension of this, women will want to speak with other franchisees
that are in similar lifestyle or family situations with the aim of discovering
how they can have it all – how to effectively manage and juggle everything.
Finding #4 –
Collaborative Decision Making Process
Women are prepared to slow the franchise recruitment process down in
favour of taking more time to consider the franchise and discuss it with
others.
Women tend to engage and involve many people, and enjoy a more
collaborative decision making process.
The existing female franchisees interviewed classified feedback and advice
from the bank, children, friends, past franchisees and the person conducting
the recruitment process as ‘important’. Feedback and advice from existing
franchisees, consultants, professionals and partners was classified as
‘critical’. However, the most important thing here is that all of these people
were asked for their opinion.
Pulling Trouble’s Tail – Part Two
The timing of spouse involvement in the franchise recruitment process may not be
without effect.
If the male involves a woman after they have commenced the recruitment process,
be prepared for the woman wanting to restart the process again, from the
beginning, with no short cuts.
And the reverse can also happen. When women (typically in a women-only
partnership with a sister, relative or girlfriend) involve their spouses later in the
process, the male’s behaviour may initially be suspicious or even argumentative
until they learned more about the franchise opportunity.
© Corven Pty Ltd: March 2008 PAGE 10
No part of this paper is to be reproduced without the express permission of the author.
Summary
The results, even in their preliminary form, indicate that areas of
commonality unique to women are:
o The perception of being risk averse;
o Research and detail orientation;
o Due diligence focus and current competency assessment and
o Collaborative decision making processes.
When asked for some words of advice to women investigating a franchise
opportunity, the current franchisees interviewed mentioned that having
realistic expectations, considering how the business would impact their
current lifestyle and the emotional aspect of business ownership as
important considerations.
Been there, done that! Words of advice from current female franchisees...
“Is this what you really want? Are you prepared to live, breath, and eat your
business?”
“It is critical for a woman to look at the business at several levels, not only the
financial aspects, but more importantly the emotional aspect, as being in business
is life changing.”
“Do your homework, visit as many stores as you can, talk to everyone and have
confidence in yourself.”
“Pay yourself and have time for yourself. Enjoy and have fun.”
A Word for Franchisors...
What skills are required to effectively recruit and select franchisees?
“Women have brought a depth of understanding to the entire community
regarding how to effectively match a franchise with a franchisee. Women
brought in the idea of strong communication and reading between the lines to
really match the right person with the right franchise, instead of selling a
franchise to sell a franchise” (Franchiseblog, 2006)
Should Franchisors customise their franchise recruitment systems towards
women?
Nathan says that franchisors should consider strategies to attract more
women franchisees and tailor their recruitment process to meet the unique
needs of women.
Research completed in 2007 by Sydney-based firm 10 Thousand Feet
revealed that only 15 percent of franchisors had a tailored strategy for
recruiting female franchisees. Their research went on to indicate that 82
percent of franchisors with a tailored strategy for recruiting female
franchisees believed they would recruit more franchisees in the coming year
than the previous.
This could indicate that if franchisors evolve their franchise recruitment
process to reflect the unique factors attributed to women then at the very
least, it may deliver a far more qualified and competent franchisee –
regardless of their gender.
© Corven Pty Ltd: March 2008 PAGE 11
No part of this paper is to be reproduced without the express permission of the author.
Further Research
This study aimed to identify unique factors and common themes attributed
to women as they interact with the franchise recruitment process, conduct
due diligence, and ultimately influence the decision to purchase a franchised
business.
It was the intent to conduct a small sample size study to investigate if there
are, indeed, any unique factors.
It is the conclusion of Corven that there are unique factors attributed to
women in the franchise recruitment process, being the perception of risk-
averse; research and detail orientation; due diligence focus and competency
assessment and collaborative decision making processes.
The broader franchise community may benefit from knowledge and insight
on the following issues:
o What kind of franchises are women getting into? Commentary
indicates that 45 percent of women choose to get into a business that is
different from what they did before (The Time is Right for Women in
Franchising, 2007) yet more investigation needs to occur.
o The role of emotional intelligence in the franchise recruitment process.
How do emotions and instinct influence decision making processes in
franchise systems?
o Feminine competencies and what do women bring to a franchise that
men might not? The concept of feminine and masculine competencies
needs to be developed further in a franchise context. Comments on the
impact of feminine competencies include that “women (as experts in
feminine competencies) may be able to facilitate harmony, dispute
resolution and collaboration better than male peers because they
communicate and phrase things differently, as well as view situations
from different perspectives than men.” (Fritscher-Porter, 2005)
Conclusion
Preliminary findings indicate that women consider a franchise for a myriad
of reasons, and a woman’s information needs are as varied. Women are
organised, informed and are more than prepared to slow down the process
in favour of greater research and collaboration. It’s all about making the
right decision for themselves and their current lifestyle situation.
The franchise opportunity needs to feel right and women need to have an
emotional connection with it somehow.
ACKNOWLEDGEMENTS
Corven acknowledges the following collaborators:
o Greg Nathan, Franchise Relationships Institute
< www.franchiserelationships.com>
o Ian Krawitz, 10 Thousand Feet
<www.10thousandfeet.com>
o Kevin Bugeja, Franchise Selection
<www.franchiseselection.com.au>
© Corven Pty Ltd: March 2008 PAGE 12
No part of this paper is to be reproduced without the express permission of the author.
REFERENCES
10 Thousand Feet (2007) Franchisor Expansion Study
Australian Bureau of Statistics (2004) Study 8127.0 Characteristics of Small
Business
Author Unknown (2007) The Time is Right for Women in Franchising,
<http://www.whichfranchise.com/women/article.cfm?WomensArticlesID=1
77>
Author Unknown (2007) Women and Franchising – A Successful
Combination,
<http://www.whichfranchise.com/women/article.cfm?WomensArticlesID=1
76>
Author Unknown (2007) Women and Networking,
<http://www.whichfranchise.com/women/article.cfm?WomensArticlesID=1
80>
Franchiseblog (2006) Women and Franchising,
<www.franchiseblog.com/1/2006/01/21.women-and-franchising.cfm>
Fritscher-Porter, Karen (2005) A Win-Win Situation for Franchisors and
Women <www.franchise-update.com/articles/89/ >
Griffith University (2006) Franchising Australian survey report
<http://www.franchise.org.au/content/?id=364 >
Ray, Linda (2006) What Makes a Franchise Great for Women? Franchise
Update Issue III 2006
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