Franchisors raise standards – franchisors asks for more financial resources from franchisees to increase the quality of franchise networks
To boost the quality of their franchise networks, franchise companies are requiring franchisees to possess more financial resources and proven business skills than in past years.
Karin Somogyi, director of franchise services for Adia Personnel Services, an employment-services company based in Menlo Park, California, says her company is renewing an emphasis on sales experience–a criterion they consider absolutely essential. Last year Adia rejected 9 of every 10 franchise applicants because they lacked demonstrable business acumen.
Applicants to Impostors Franchising, a San Francisco franchisor of costume jewelry, must have a net worth of $225,000; a short time ago a net worth of $175,000 was acceptable. Applicants must also take a psychological-profile test to determine how outgoing they are, says Larry Matthews, vice president of franchise development for Impostors. The company rejects about one of every five applicants.
Some say franchisors are becoming too picky. But if you want to be granted a franchise, make sure your business strategies are on target and be ready to show that you can make a sale.
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