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DEVELOPING A DIAGNOSTIC QUESTIONNAIRE AS AN AID TO FRANCHISEE SELECTION

by Professor John Stanworth
Page 2: Questionnaire Discussion
 
 

The Diagnostic Franchisee Questionnaire
The following diagnostic questionnaire was developed by Professor John Stanworth of the University of Westminster's International Franchise Research Centre. It can be used in exactly the form outline below or, alternatively, can be modified to fit any franchise company's precise needs.

When Should It Be Used?
The timing of the franchisor's use of the Diagnostic Questionnaire can be organised to suit the needs of individual companies but the possibilities are numerous:

  • It can be sent out with the company's initial information pack as part of a first response to enquiries. This can have the advantage of making prospects think through their own position whilst spelling out some of the issues involved in being a franchisee. This initial educational function can be useful in 'cooling down' some of the 'dreamers'. Franchisors might even suggest that potential franchisees not only complete the exercise for themselves but also get other people who know them to complete it for them as an aid to checking out the image others have of them. Both versions should then be returned to the franchisor for discussion at the interview stage.
  • Its use can be delayed until, say, the first interview stage when the franchisor has the choice of allowing the prospective franchisee to complete it in private unprompted, or with the franchisor administering it as part of a face-to-face interview.
  • It can be used when discussions are well advanced and then used to the advantages of both parties as an additional check of their understanding of one another.

Which of the above alternatives is preferable depends on the franchisor's other selection/recruitment techniques but, on balance, the first probably has most to offer since it makes the prospective franchisee think through his/her situation as well as providing the franchisor with valuable information later on.

Questions
Twenty questions are listed below and these are designed to get the potential franchisee to analyse his/her ability to:

  • Cope with the isolation of self-employment (Q1)
  • Exercise self-discipline (Q2)
  • Work long hours under pressure (Q3)
  • Learn from failures (Q4)
  • Compete with self-imposed standards (Q5)
  • Take unpopular decisions (Q6)
  • Resist impetuous or emotional behaviour (Q7)
  • Take a balanced view of events (Q8)
  • Tolerate uncertainty (Q9)
  • Accept advice (Q10)
  • Demonstrate financial viability (Q11)
  • Demonstrate support of spouse (Q12)
  • Demonstrate enterprise background (Q13)
  • Demonstrate profit motivation (Q14)
  • Demonstrate sales orientation (Q15)
  • Demonstrate receptiveness towards franchisor's training (Q16)
  • Demonstrate growth orientation (Q17)
  • Demonstrate a favourable attitude towards task delegation (Q18)
  • Take the long-term view (Q19)
  • Demonstrate belief that individuals can 'make things happen' (Q20)


Interpreting Replies
The marking scheme, contained in the body of the questionnaire and presented in square brackets [ ], should, in practice, be separated out if the franchisor does not wish the prospective franchisee to be able to conduct his/her own marking. A good score for the exercise in its present form would be 25+ of a possible maximum score of 40 marks. It is worth remembering that no exercise like this can ever be totally efficient in predicting success. It is essential that it is used in association with other personnel management techniques. With that proviso, it should pay good dividends.

The twenty questions, along with marks in brackets [ ] are presented on the following page. These are 'forced choice' questions where the respondents is asked to opt for one of a choice of 3 possibilities: (a), (b) and (c) on each of 20 questions. This 'forced choice' format is designed to stop people sitting on the fence. It is quick and easy to administer, whilst giving the franchisor leads on issues that can be followed up in greater detail later.

If you the franchisor wish to use this exercise essentially to inform a prospective franchisee of whether or not they are likely to be suitable material, you may provide them with the marking scheme to facilitate self-assessment and, in the process, allow them to see which statements are regarded favourably by your in terms of relevance to your franchise.

On the other hand, if the main reason for running the exercise is to get information from the prospective franchisee in as accurate a form as possible, you the franchisor should mark the completed questionnaire. If the prospect does not know which statements carry most marks, he/she is less likely to be tempted to deliberately select the statements attracting most marks. It is worth, in any case, stressing the point that giving dishonest answers in order merely to accumulate points is a fruitless exercise from all points of view.


The Points Behind the Questions

To add more 'meat to the bone', what follows here is a more detailed background on the issue being investigated in the questions above:

Q1 Franchisees need to be able to survive feelings of isolation. In contrast to being an employee, they have no immediate boss, or peers, who can give help, advice or moral support.

Q2 Franchisees need to be able to exercise self-discipline. In running their own business they will be responsible for a wide range of tasks. Some of these will almost certainly prove satisfying whilst others will prove highly frustrating. The franchisee will be responsible for allocating his/her own time and can, at their peril, neglect tasks such as paperwork, financial control, invoicing and chasing payment. Although these tasks are sometimes viewed by franchisees as stopping them from getting on with the 'real job' of producing and selling, no business can survive without them.

Q3 Franchisees will usually need to work harder than they have even worked before. This requires both mental and physical stamina. In the early days of building up a franchise, there will be little time for leisure activities, holidays or illness. Some advisers go as far as recommending that anyone considering setting up in business should consult their doctor first.

Q4 Franchisees need to be able to learn from failure. Disappointments are inevitable in business and can lead to demoralisation. A good businessman/ woman, however, must possess the resilience to survive setbacks and learn from them.

Q5 Franchisees need to be able to compete with self-imposed standards. When working on your own, targets and standards need to be set which act as goals reinforcing motivation. If these goals are set too low they will have little motivating value. If they are set unrealistically high, they will not be achieved and a sense of failure and demoralisation will result. Thus, modestly ambitious, though not unrealistic, goals need to be set and used as markers of achievement.

Q6 Franchisees need to be able to take unpopular decisions. It is impossible to remain popular at all times and any attempt to do so it likely to have costly consequences for your business.

Q7 Franchisees must be able to resist impetuous or emotional behaviour. It is tempting, especially when you are your 'own boss', to exercise the associated independence by reacting to frustration in what might later be seen as a whimsical manner that is not in the longer-term interests of the business. This may be emotionally satisfying in the short term but should be resisted at all costs.

Q8 Franchisees should be able to take a balanced view of events. In business it is easy to yield to the temptation of feelings of euphoria or depression in response to good or bad news. This can prove extremely stressful and wearing. A successful businessman/women needs to be able at all times to take a a balanced view of events and to set an attitude of 'taking the rough with the smooth'.

Q9 Franchisees, running their own outlets, need to have a facility for surviving uncertainly. The setting up of a new business entity is a creative venture and requires a facility for coping with ambiguity. People with a low stress tolerance may find difficulty in running their franchise.

Q10 Franchisee must have a facility for taking advice. Having gone into business with 'independence' one of their main goals, franchisees need to avoid maximising that independence by resisting advice whether it be from the franchisor or some other expert source.

Q11 Franchisees must demonstrate financial ability. Though the clearing banks tend to lend to would-be franchisees more readily than to would-be conventional small business start-ups, it needs to be remembered that all loans have to be repaid, with interest. A large financial repayment overhead in the early days of trading can impose additional pressures.

Q12 Franchisees should, ideally, be able to demonstrate support from their spouse. Most franchise outlets work long hours involving domestic disruption. Anything less than positive spouse support here can have very negative consequences.

Q13 Franchisees should, ideally, be able to demonstrate an enterprise background. Despite the desire for self-employment being quite common, only a minority make the jump from aspiration to reality. Those who have previous direct experience of self-employment or, alternatively, have a close relative self-employed (usually a father) appear to find the transition easier. Some evidence exists to suggest that they may also be more successful in terms of business growth.

Recent analysis suggests that newer franchisors are keen on franchisees having prior experience of self-employment, but franchisors with a longer track-record are less inclined to do so.

Q14 Franchisees should demonstrate profit motivation. Amongst small business people generally, profit motivation is of a relatively lower order than other goals such as independence and autonomy. Profit motivation tends to promote greater growth.

Q15 Franchisees should demonstrate sales orientation. Despite national advertising and promotion of brand awareness by the franchisor, sales skills on the part of the franchisee can still make a substantial difference to levels of local market penetration. Local advertising and good interpersonal skills and service at the customer interface can be crucial.

Q16 Franchisees should demonstrate receptiveness towards the franchisor's training. Franchisors tend towards the view that 'starting with a clean sheet' is the best basis for initial training rather than competing with previous training that a potential franchisee may already have previously received in the field of operation.

Q17 Franchisees should demonstrate growth orientation. The income of the franchisor is directly related to the growth of franchisees. Thus, franchisees easily satisfied with low levels of growth may require considerable motivating.

Q18 Franchisees should demonstrate an ability to delegate rather than attempt to undertake all jobs themselves. Failure to delegate will limit business growth and lead to the franchisee spending time on tasks that could be performed by less key staff.

Q19 Franchisees must be capable of taking the long-term view. In an economy suffering endemic 'short-termism', long term planning and goal setting is likely to pay dividends by giving an edge over the competition.

Q20 Franchisees should have an ability to 'make things happen'. People with an 'internal locus of control' tend to believe they personally can influence their environment. This belief can become a self-fulfilling prophecy.


Changes to Suit Your Company
Obviously, any company using this technique can add additional questions, drop others and even reallocate the points on certain questions in line with their own specific requirements.

By way of example here, Q1 refers to the ability of an individual to cope with feelings of isolation. Depending upon the precise nature of your franchise, and also the stage of its development, this factor may be upgraded or reduced in its importance. Also, many franchisors express a preference for potential franchisees coming from outside the line of business in question. Others, however, may see advantages in recruiting people from similar lines of business (Q16). Further, some companies look for franchisees who are very ambitious and wish to grow (Q17). Others, selling what may be called 'job franchises' better suited to a one-person operation, may feel that such ambition could be stifled or counter productive.

Changing the points scheme to accommodate such in-house preferences is a relatively simple matter.

 
 
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Author
Professor John Stanworth is the director of the International Franchise Research Centre and has been engaged in research into franchising since the mid-1970s. He also leads the Future of Work Research Group, based at the University of Westminster, which has a record of specialist research in Teleworking, Small Business Development and Human Resource Management. Studies have been undertaken for many clients, including The Department of Trade & Industry, The Department for Education and The Economic & Social Research Council.

International Franchise Research Centre
The International Franchise Research Centre (I.F.R.C.) is committed to improving the understanding of franchising. This is achieved by the publication of impartial research and by the encouragement of informed debate.

Contact:
International Franchise Research Centre
University of Westminster
35 Marylebone Road
London
England NW1 5LS

Tel. +44 (0)20 7911 5000 Ext.3025
Fax. +44 (0)20 7911 5839

Internet: http://www.wmin.ac.uk/IFRC/

 
 
 
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