Negotiate A Better Deal With The Franchisor

In any negotiation setting, all parties invovled will normally look to gain some advantage over the other party(s), seeking to exploit any situation and come out on top. But the business landscape has changed. From either a buyer’s or seller’s perspective, there are many other options available now. First choice is now followed by maybe five other equally plausible options.

In the case of franchising, this is especially relevant as there are so many opportunities out there that it will be almost impossible to accurately put a number on franchises today. Competition for the prospective franchisee’s attention today is intense and franchisors know it. However, this doesn’t mean franchisors are desperate and willing to accept any offer on the table.

Related: The The Worst Scenarios That Could Happen After Acquiring A Franchise

 In any negotiation setting, all parties invovled will normally look to gain some advantage over the other party(s), seeking to exploit any situation and come out on top. But the business landscape has changed. From either a buyer’s or seller’s perspective, there are many other options available now. First choice is now followed by maybe five other equally plausible options.

Assuming background and financial diligences have been completed, franchisors will, first and foremost, look to determine whether a candidate has what it takes to be a good franchisee. While “good” is subjective to every franchise organization, this normally revolves around a candidate’s character, past experience and drive for success. Furthermore, a franchisor plays the role of a leader so candidates must understand they will be required to follow when asked.

Related: What Characteristics Do Franchisors Look For In Franchisees During Recruitment?

But sometimes, candidates get carried away and expect to be wooed, thinking just because they are in a buyer’s postiion, they get to call the shots during negotiations. While franchisors are afraid of having no franchisees, they are typically even more afraid of having someone who is full of themselves joining the system. Someone like that, when part of the system, could pose a threat with errant bahaviour that harms the franchise brand. Rather than trying to outwit the franchisor into a better deal, candidates should instead look to showcase their qualities - focus, attitude and mindset - in taking up the franchise during negotiations.

Similarly, if the franchisor spots a candidate’s nature to potentially become a good franchisee, an astute decision will point towards negotiating a fair deal. Sometimes, franchisors may even be willing to excercise customized leeway in order to make the business arrangement materialize into a positive commercial outcome. But candidates need to give franchisors a reason to do that.


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