The economic climate is certainly challenging in North America these days. With the huge drop in housing prices in some areas of the U.S. and the reluctance of banks to give out loans, it's virtually impossible to achieve the same growth rate in franchises awarded as this time last year.

Some of our clients have found ways around these issues though. One franchisor has a terrific reputation in their industry and they take full advantage of that. Their great reputation helps them attract a large number of candidates, even in an area that's been hit hard by the economic downturn. Then, to make sure they don't lose these candidates, the franchisor is loaning the candidates the funds to get started. But before the franchisor accepts the candidate, they make sure the candidate is rated highly by our FranchiZe Profile.

Possibly risky, yes. But undoubtedly effective. Where other franchisors are having a tough time squeaking by right now, this franchisor is growing faster than they were last year.

The cost of failure
Not only are they doing what it takes to attract candidates, they're doing what it takes to make sure the franchisee succeeds. Why? Because with most franchisors, it costs on average, $100,000.00 in direct, measurable out of pocket expenses every time a franchisee fails. Never mind what it costs in terms of lost opportunity. Or even the simple aggravation of dealing with an under-performing franchisee.

A natural reaction of franchisors to tough economic times is to simply accept every applicant that comes along. This may appear to be a smart thing to do. After all, they're bringing in much needed cash. But over the long haul, it's a dangerous game to play.

Even one failure per year can have a seriously negative impact on your bottom line. And when you accept marginal candidates, the number of failures you're going to have to deal with in a year or two can prove to be fatal.

Here's what I suggest. Ideally, use a scientifically validated selection tool to help you. Yes, you may still accept a lot of the candidates that come aboard, but at least you'll know what you're getting into. Our FranchiZe Profile is designed not only to help you select the best, but tell you areas where the candidate needs training.

A no-cost alternative for franchisee success.
Did you know that, although far less effective than the FranchiZe Profile, a great way to improve your odds for success is to simply ask the same set of questions of each candidate? By using the same interview questions for all candidates, you should be able to predict how well a candidate will perform 51% of the time. And it needn't cost you a penny! I'll let you know more about the research in a future issue.

Training is the key
Knowing in which areas a candidate needs training gives you a huge leg up on helping the candidate succeed. Since the FranchiZe Profile measures attitudes and beliefs, you can see the results quickly. As you know, attitude is everything when it comes to success. And the research we've done over the years proves it. What's really great is that attitude is the one thing that each franchisee has total control over. They can choose to have a "can't" attitude. Or they can choose to have a "can do" attitude. If you're interested in your franchisee's success, doesn't ti make sense to help them develop this "can do" attitude? I'll tell you a more about this in a future issue as well.