Franchisees back compulsory franchise education: Report

Prospective franchisees strongly support mandatory pre-entry franchise education programs, with many unhappy over the scope of information on offer, according to a new report.

A survey of 1,200 budding franchisees by consultancy firm Corven, which advocates for pre-entry education programs, found that 71% supported compulsory education sessions prior to entering into a franchise agreement.

However, the report claims that education isn’t the “panacea” to good franchisee/franchisor relationships, saying that many respondents felt that education programs contained “spin”.

The report states that the majority of survey respondents reported good and bad examples of franchise education spin, including the impression that educational schemes gave a greater chance of being accpeted by a franchisor.

Julia Camm, franchise education specialist at Corven, says: “The temptation to dumb down franchise education is evident and there is a misdirected notion that there is only a certain amount of knowledge that franchisees need to learn.”

“Our study clearly shows that franchisees are encouraged to take up education to ensure they armour and protect themselves before entering a franchise… but they are not learning everything they need to make a highly informed decision.”

“The sector needs to balance the desire to grow at any cost, with a genuine aspiration to improve the quality of franchise candidates through effective learning and due diligence to understand the actual demands of business.”

Franchisors have found it increasingly difficult to find skilled franchisees in Australia, with a high employment rate hampering efforts to expand chains.

Despite this, several brands have attempted to establish new operations in Australia, with US companies such as Pizza Hut and Ben and Jerrys recently embarking upon franchisee recruitment drives.

Steve Wright, CEO of the Franchise Council of Australia, says, “I am glad to see widespread support for the concept of pre-entry education for prospective franchisees; this is in-step with the long-standing principles of the FCA of franchisor support and franchisee due diligence.

“Do note that the author of the research is a participant in pre-entry programs, sponsored by the FDA, as part of RCA efforts to ensure all new franchisees enter the sector with their eyes wide open and with the greatest possible understanding of the franchising concept and the outstanding opportunity it provides.”