Vetting Prospective Franchise Owners: Never More Important than in Today's Economy
Perhaps the single most important part of the franchise sale is the franchise application process. Franchisors should integrate efficient and thorough vetting and due diligence steps within their application process to ensure the quality of prospects who apply for franchise ownership. This is particularly vital given today's high inflation.
To show just how crucial this step is in the franchising industry, here are the steps of a comprehensive vetting process for franchisors, and how it can be beneficial for the applicants, too.
Franchise Application Process for Franchisors
While getting the right candidates to invest in and become owners of your franchise is crucial for all brands, regardless of their size, it is especially critical for emerging brands to get this right.
Emerging franchises must be extremely diligent in vetting prospects and choosing a qualified candidate that is a good fit for the brand and will bring value with the appropriate financial wherewithal. For emerging brands, it’s all about momentum. The more capable and committed Franchise Owners you can find early on those that are willing to do what it takes to succeed, the more likely they can positively contribute to the overall growth of the franchise system. If you add franchisees who lack the financial means to succeed, you may wound your brand for years to come.
Financially Vetting Your Candidates
Prospects should be qualified for financial requirements before moving forward in the sales process. Just as you should be upfront about what is expected in terms of experience and skills, brands need to be transparent on the financial requirements of investing in their franchise. This ensures that there won’t be any issues down the road where the Franchise Owner runs out of money while addressing initial start-up costs. This is an important consideration considering the spike in these costs. In many instances, your applicants may require a franchise loan and additional franchise financing to get off the ground.
Financially vetting candidates can be cumbersome, especially when it comes to substantiation tasks like collecting bank and brokerage statements. By outsourcing that work to a company that has technology and processes like BoeFly, brands can save valuable time while improving the quality of their vetting. When choosing a partner, you must rely on one who has bank-level security to ensure your franchisees' data remains safe.
Vetting and Verifying the Quality of Your Applicants
As a crucial first step, franchisors should implement formal diligence early on in their franchise application process to eliminate those who are not good fits. This will give franchisors insight into their applicant’s liquidity, net worth, credit report, and any red flags that may come about through their criminal history. For example, does the applicant meet the brand’s liquidity requirement? Too often, applicants don’t know their liquidity or include items that should be excluded.
If your franchise ends up in the wrong hands, there are potential risks to your reputation, as well as possible legal issues down the road. Both of those can be detrimental to your franchise system.
How BoeFly Helps Franchisors with Their Franchise Application Process
At BoeFly, we understand the importance of empowering brands to ensure they are investing time into the right prospective Franchise Owners. To help brands find the right partners to join their franchise family, we offer bVerify™, our thorough verification tool. With bVerify™, we can efficiently verify candidates’ liquidity and net worth, as well as quickly handle credit and criminal background checks. With the ability to integrate into CRMs like FranConnect™, franchisors can have complete visibility on the verification process.
Join the hundreds of savvy franchise brands that understand how outsourcing the vetting and verification process can drive efficiency to choose BoeFly. By partnering with BoeFly, franchise directors can spend more time finding qualified candidates and less time on tedious paperwork. To get started on integrating bVerify™ into your franchise application process, fill out this form, and one of our experts will be in touch.
BoeFly drives growth by delivering financially qualified candidates increasing lead-to-franchisee conversion, and helping franchisees secure financing. BoeFly has supported more than 600 unique brands since 2014. Learn More
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