What attributes do you look for in a potential franchisee?
For Cash Converters, a good fit is the most important thing. We want people who are enthusiastic and passionate, and that are willing to take on the values of the brand.
We’re also looking for hard-working and determined individuals. Ultimately, we want all our franchisees to be multi-unit franchisees.
And how important is retail and business experience?
Experience can obviously never hurt, but it isn’t crucial. We provide a lot of training, so we’re confident that by the time a new franchise opens, the owner will be ready to deal with the day-to-day operations of the business.
We recommend: Checklist of Information to Secure From a Franchisor
What sort of training do you offer specifically?
We provide about six weeks of training in an operating store, giving a new owner great insight into what it is truly like to manage a Cash Converters.
Once this is done and the franchisee has opened the new store, he or she is given an additional four weeks of training in the store. So new franchisees aren’t abandoned and left to fend for themselves.
There is real on-the-ground assistance during those critical early days of operation.
As a franchisor, we want franchisees to succeed, so we take responsibility when it comes to training. We have even implemented an online training component that makes it easy for existing franchisees to refresh their training and expand their skills.
How long does it typically take for a new franchisee to open the doors to a store?
It really depends. The shortest period I’ve ever seen was four weeks. On average, I would say that it takes about six to eight months from the initial enquiry to the opening of a new franchise.
The important thing is that we want franchisees to be ready. Pushing a new franchisee through the process too quickly won’t benefit anyone.
We’d rather see the process take a little longer, yet result in a successful and sustainable franchise.
As a franchisor, how do you view franchise funding?
We expect franchisees to come to the table with an unencumbered sum that covers 50% of the franchise cost.
If a prospective franchisee can provide this, we assist them in coming up with the rest by facilitating finance. In fact, we compile all documentation on the franchisee’s behalf, ensuring the best possible odds of securing a loan.
The advantage of dealing with a large and respected franchisor is that lending institutions are far more receptive to loan requests, because there is less risk in the endeavour. The model has already proven itself multiple times.
We recommend: Is The Franchise Route Right For You?
In your experience, what are some of the potential hurdles that new franchisees overlook or ignore?
Operating capital is an issue that many new franchisees don’t pay enough attention to.
It is important to remember that, apart from the cost of the franchise, you will need operating capital to keep yourself afloat during the first six months or so.
Many of our franchisees discover that they grow so quickly they suddenly need access to a lot of cash, so you want to have enough money on hand to take advantage of this growth. You don’t want to have to turn potential customers away.
Lastly, a franchisee is obviously not an employee or manager, so how does a franchisor manage the delicate issue of dealing with franchisees and ensuring that they conform to the rules of the organisation?
The relationship between the franchisor and franchisee is obviously a delicate one. At Cash Converters we treat these relationships in the same way that we treat customer relationships.
We recommend: Checklist for Interviewing Existing Franchisees
We always try to be fair and understanding. Ultimately, the long-term success of the franchisor depends on the success of the franchisees, so it’s a symbiotic relationship. It’s not a zero-sum game.