Effective today, we're no longer going to be publishing the "Dynamic News" e-newsletter. Instead, I'll be using this blog to keep in touch. This way, I'll be able to share information with you "as-it-happens".

For the past month, we've noticed a slowdown in the numbers of franchises being sold in the United States. Canadian franchisors haven't seen the slowdown. Could this be another result of the sub-prime mortgage meltdown in the U.S.?

With fewer and fewer candidates in the pool, I see three options available to franchisors:

1) Accept every candidate that comes through the door with access to enough assets to "open up shop".

2) Find ways to lower the cost of entry into the franchise.

3) Make sure that the franchisees that are accepted are going to work out.

These days, it's simply too expensive to accept anyone just because they have the cash. When you consider service type franchisors spend about $50,000, and retail franchisors spend at least $100,000 in direct, out of pocket expenses every time they remove a franchisee from their system, selecting the wrong franchisee gets expensive very quickly. And it's difficult to lower the cost of entry quickly enough to meet your current needs for growth.

The quickest, easiest and most cost effective way to continue growing is to make sure you've got a user-friendly, scientifically valid and accurate way of weeding out unsuitable candidates.

There are a couple of steps involved in this. The first thing to do is develop an interview process that is identical for every candidate. Once an applicant sends your their application, everybody needs to be treated the same. Ask them the same questions, require them to achieve the same milestones.

This consistency is critical. Without consistency, there's no way you can develop a system that gives you the information you need about a candidate to help you make the right decision.

The second thing you can do, is to be proactive and begin using either the PreInterview Checklist and /or the FranchiZe Profile. Both of these profiles were designed from the very beginning to give you the information you need to make a good decision.

Using the PreInterview Checklist and the FranchiZe Profile to help you bring the best candidates on board will save you far beyond anything you spend on them. Look at it this way. By saving yourself just one bad decision a year, you'd have to score thousands of profiles to even come close to spending what it would cost you for one failure. Never mind what you'd save by knowing how to train a franchisee to help them become more successful.

I welcome to post your comments. I'd love to hear from you.

Fred Berni
October 16, 2007