Who buys franchises

An article about what types of franchising partners there are, what to prepare for and how to work with each category of franchisee.
Enter your email to receive notifications about new site publications.
In the process of developing a franchise, before selecting promotional tools and sales channels, a crucial question arises: "Who exactly are we selling to?" At the outset, it's essential to define your potential franchisee, understand their motivations for buying into your franchise, and identify the information channels they typically use.

In this article, I'll outline the primary categories of franchisees I've encountered in my experience
Brand fans
A category of franchisees who most likely wanted to buy a franchise even before it actually appeared. These franchisees don't care how much they have to pay to start doing business with you. Yes, in fact, they will not compare your franchise with anyone, they are fans...

For fans, there is a favorite brand and everyone else. Naturally, like any franchisee, this category also needs support and control. Believe me, if you manage to ruin your relationship with these partners, you will make an offended, disappointed enemy.
Married couples
Franchisees who have typically established themselves in their primary profession, are successful in their hired positions, and purchase a franchise using their accumulated savings. Naturally, they buy it so that their wife can manage the franchise business. They choose some cozy and interesting business that they want to build for their own pleasure. Most likely, they are very well-mannered and pleasant people who will be comfortable to negotiate and work with. But there is one main drawback - these people have never been entrepreneurs. They do not have even minimal business skills. They will be embarrassed to bargain with suppliers, they will not immediately understand how to properly select, motivate, and fire personnel. In general, if you work with this group, be prepared to lead them by the hand and teach them all the intricacies of business.
Do you want to package your franchise?
Fill out the form and our specialist will contact you shortly.
Small entrepreneurs
A group of partners who don’t care what kind of business they do, just to make money quickly. They are usually aware of all the hype franchises and popular earning trends.

Typically, such merchants do not make significant investments. If the investment in opening a facility for your franchise is more than 3-5 million, you will most likely never meet representatives of this group.

When accompanying such franchisees, it is necessary to correctly build control tools, because for the sake of profit they will be ready to do anything: save on service, on personnel, on raw materials. They will not respect your brand or your mutual customers. The most important thing for them is profit.

But there is also a positive side - these are already established entrepreneurs who are very active.
Portfolio franchisees
These are entrepreneurs who have formed a certain portfolio of franchises that they are actively developing. They can simultaneously open a franchise: a pizzeria, a beauty salon and a barbershop. This category of franchisees usually knows what indicators to look at, what questions to ask and how to choose the right franchise. If you have such partners, your franchise is developing in the right way. The only advice: do not allow yourself to be “twisted” and do not agree to some super unique conditions.
Owners of premises
Businessmen who own premises suitable for your business. As an alternative to the usual rental business, they may decide to start a franchise business in their own premises. Obviously, this is an interesting category of partners, if only because these franchisees are “freed” from rental payments, and the payback of their business occurs faster. The fly in the ointment will be that they are not willing to spend a lot of time running the business. They are already accustomed to passive income, and may mistakenly consider a franchise business to be just such a form of income.

Case study: a company that owns several shopping centers bought a cafe franchise to open on its own premises. Taking into account the scale of the business, the partner in this example can easily be classified as a Corporation. I can note that the deal took several times longer than usual. The franchise seller prepared a huge number of reports on all aspects of the business.
Students
A category that is clear without additional comments. Surprisingly, some companies have a team of partners of 18-20 years. Money borrowed from parents is usually used to purchase a franchise. The main motive is to do business in a prestigious and fashionable manner. I have no experience working with franchisees’ youth audience. From the outside it is clear that such partners are louder and noisier than mature franchisees. As a result - more mentions, publications, photos, word of mouth... if that's what you need, of course.
Corporations
Your franchise may come to the attention of large businesses. The usual goal is to complement an existing business. "We have a network of children's entertainment centers - we will also buy an ice cream cafe franchise." As a rule, these are very structured companies. They pay great attention to the analysis of indicators and financial information. Having such a partner will bring you an expansion of your network by 10-50 new objects. Therefore, it often happens that a franchise is sold to such a partner under some special conditions.

A case from my practice: a confectionery chain acquired a fast food cafe franchise. The company began opening new facilities under the same roof as its cafes. Their predominantly child audience received all the usual menu items in one place.
In this article I have listed the main categories of partners that I have encountered in my practice. I recommend choosing those that suit your business. Naturally, you will add your own details and details to the portrait of your franchisee.