While low unemployment levels are good for the economy, theyÕre not as helpful to franchisors that are looking to recruit new franchisees. As job security and wages increase, individuals are less likely to take the risk of leaving the safety net of paid employment as the potential rewards from acquiring and running a successful franchise are relatively less appealing than they previously were.

This creates a situation where franchisors have to compete more vigorously with one another to secure quality franchisees. Conversely, it places the franchisee candidate in a better position to negotiate on a franchise that best suits their needs.

DC StrategyÕs research not only reinforces this message but has found that prospective franchisees are also becoming more sophisticated in their information gathering, opportunity assessment and negotiation processes. Prospective franchisees now have access to more data than ever before on various franchise networks. The traditional, formal sources such as franchisor websites and consulting advice sites are supplemented by informal sources such as forums and blogs populated by current, past and potential franchisees with their thoughts on the various franchise networks.

One of the key changes taking place, however, is in the number of franchisors that prospective franchisees are ÔinterviewingÕ. Gone are the days of prospective franchisees talking with one or two franchisors to find out if theyÕre eligible for a franchise and whether or not that franchise opportunity is suitable for them. TodayÕs applicants typically speak with three or four franchisors and in some circumstances will meet with seven or more franchisors.

This behavioral shift creates challenges for franchisors and how they handle these challenges marks out the smart operators. Franchisors now need to be more aware of what other franchise opportunities are available in the marketplace as ultimately these are the businesses they will be competing against to secure good quality franchisees. They need to be particularly conscious of how their own brand is represented and regarded in the market; this is not about the glossy brochures and store design used, but rather what the market is saying about a franchise network and the benefits of being part of it.

In this situation the market includes past and present franchisees, other franchisee applicants and past and present customers. This is a very broad net that prospective franchisees are casting in order to research business and franchise propositions, which obviously creates numerous issues for franchisors in ensuring virtually every aspect of their current business model is operating to the highest standard.

Another clear insight emerging from DC StrategyÕs research is that most franchisors are still not doing enough to leverage the internetÕs potential for building interest in their brand. The online strategy for many franchisors remains very website and brochure centric. Too few franchisors have made real inroads into the various other means of building their corporate profile including third party websites that provide advice or insight into businesses, social media and blogs.

The overwhelming market opinion is that the current shortage of prospective franchisees, and their more discerning nature, is a situation thatÕs here to stay. So what should a first class franchisor be doing? The successful franchises and recruiters of the future will be those that embrace change and make the effort to ensure their underlying business is sound, their existing franchisees are performing well and that the marketÕs perception of their business remains positive. While these are the fundamentals of any sound business at any time, franchisors must also ensure theyÕre harnessing the power of various media to convey these positive messages.

Franchisees are buying into the corporate culture, so it is a wise potential franchisee who is making the most of the opportunities to thoroughly investigate the franchise systems on offer, ensuring their investment is in a business that responds to a changing market.