The Chemistry of Franchising
As statistics demonstrate, franchising is the average person's most viable method of independent business ownership. Nevertheless, not everyone who intends to go into business for himself or herself is a suitable candidate for a franchise business. The traits that characterize successful franchisees vary depending on the business format, industry, local market, and, not least of all, the structure and personality of the franchisor itself. Nevertheless, certain qualities distinguish best-odds franchise operators from other small business owners, in terms of personality traits, thinking styles, and learning styles.
An individual's knowledge, abilities, attitudes, and personality traits are evaluated by means of psychometrics.
Increasingly, franchisors are employing psychometric evaluation to qualify prospective franchisees. The science of psychometrics is rooted in ancient Greece. In 370 BC, Hippocrates, commonly regarded as the "father of modern medicine," defined four basic personality traits, or "temperaments:" cheerful, somber, enthusiastic, and calm. Over the centuries, numerous theorists drew inspiration and guidance from the ancient Four Temperaments model.
Now, perhaps more than at any time in the last century, the characteristics of business owners--and the economic and
business environment in which they operate--are continually changing. Indisputably, small business owners and entrepreneurs make important contributions to business creation and growth in the American economy. According to the U.S. Small Business Administration, understanding the characteristics of business owners is important in measuring the overall economic well-being of the economy.
Based on studies of franchisee motivation, people who invest in franchises, whether male or female, seek an opportunity
for self-management and self-expression. Many franchisees actually sacrifice a portion of their earnings potential as wage earners for the opportunity to own their own businesses. A prominent reason people invest in franchises is the quest for financial growth and, ultimately, riches. Many franchises are purchased strictly for investment purposes, based on the speculative value of the business.
Most who aspire to independent business ownership do so to pursue a dream of financial independence and security.
Someone who invests in a franchise most likely expects more from life than the seeming drudgery of a wage-earning career. He or she has a high level of ambition and an irrepressible belief that the rewards outweigh the risks. So, although money may not be the number-one consideration in the minds of a franchise owner, financial reward remains high on the list.
In the current economic environment, for every ten new franchise businesses that are started each year, eight existing
outlets close. Franchise businesses face an enormous challenge with the approach of the impending Demographic Cliff, which promises to bring radical and far-reaching changes to buying habits. Of all psychometric measurements influencing the ability to thrive in a franchise business, arguably none is more significant than adapability.
As Charles Darwin discovered while exploring the Galapagos Islands, "It is not the strongest of the species that
survives, nor the most intelligent... It is the one that is the most adaptable to change."
The Franchise Insider Dennis L. Foster is the principal of Franchise Associates International and is widely regarded as one of America's foremost authorities on franchising.
Copyright © Dennis L. Foster