Corven on Women and the Franchise Recruitment Process March08 · franchise recruitment process and conduct due diligence. The franchise recruitment process refers to the process or

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.



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.



“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.



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.



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.



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.



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.



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.



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.



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>



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,


76>

Author Unknown (2007) Women and Networking,


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

ABOUT CORVEN

Corven is a Melbourne-based consultancy specialising in industry and special

interest research programs and provides education advisory services to

organisations and membership associations

Contact Corven

Call: +61 438 066 069

Write: [email protected]

Visit: corven.com.au

Documents

Corven on Women and the Franchise Recruitment Process March08 · franchise recruitment process and conduct due diligence. The franchise recruitment process refers to the process or