Franchising requires entrepreneurship through partnership.

Interview with Joost Bos

What is the essence of franchising?

“Franchising is collaborative entrepreneurship. By pooling their strengths, entrepreneurs can operate more successfully in the market. The franchisor has a proven unique business model, and the franchisees bring their entrepreneurship, regional knowledge, network, and resources in terms of location, money, or other assets. This way, the franchisor can grow in a manageable and relatively rapid way. The franchisee limits their risks, makes a more effective and efficient start, and receives support from the franchisor and fellow franchisees.”

How do you define entrepreneurship within franchising?

“Entrepreneurship starts with the initiator who has launched a successful formula in the market. This entrepreneur is often very innovative and creative, recognizing early on the future needs of the market. A business model is developed that, after some time, is highly perfected. Then entrepreneurship enters a new phase, and the entrepreneur seeks new ways to grow. A good option is often franchising: partnering with other entrepreneurs to offer the product and/or service nationwide.”

But what type of entrepreneur is that franchisee?

“They can be very different types of people. This indeed depends heavily on the business model and the structure of the franchise organization. One of the success factors in franchising is selecting the right entrepreneurs. The franchisor must, given their added value to the entrepreneur, make a good analysis of the type of entrepreneur that fits within their concept. Generally speaking, they are entrepreneurs who can function well within a larger entity and who see the added value of collaboration.”

Don't all franchisors want young enthusiastic entrepreneurs-to-be who are well-educated and still easy to guide?

“It's true that many franchisors focus on the same group of relatively young people. But that potential isn't that large. Considering that the group of young people is shrinking in the near future, you must be willing to look at it differently. You'll see that there are more target groups open to entrepreneurship. What about an experienced, driven re-entrant who wants to start their own employment agency, or a greengrocer-owner who is the future supermarket entrepreneur. In liberal professions, you primarily select entrepreneurs based on their suitability for the specialization, which often has less to do with age. A psychological practice, personal coaching concept, or commercial training organization especially seeks service-oriented entrepreneurs who see the relevance of collaboration and sometimes do indeed have more experience.”

How do you ensure success in a franchise partnership?

“It has to come from both sides. Franchising is essentially a unique alliance that—if executed well—leads to a genuine partnership. The franchisor must continuously work on a win-win situation. They must provide their franchisees with sufficient tools for success and build a good relationship with them. The entrepreneur must realize that they are functioning within a larger entity. There is a good transfer of knowledge and experiences based on clear agreements. Only then do you create the conditions for continuity and profitability.”

Does this mean everything must be documented in contracts?

“Markets are changing rapidly, so what is required of both the franchisor and franchisees is also evolving quickly. To keep up with these developments, I advocate for maximum clarity through balanced and strict documentation of agreements. You do this with a contract but also with a practical handbook. Contracts should be as complete as possible and have a timeline of many years. The handbook details current and operational aspects more thoroughly. I advise making clear agreements from the start about things like innovation and reinvestment, about training, and about goodwill upon termination. This way, the franchise model can operate decisively, now and in the future. Franchise legislation also explicitly requires this.”

Doesn't this threaten the freedom of entrepreneurship?

“Freedom is a relative concept. We think from a perspective of strong togetherness in entrepreneurship. This implies fulfilling a successful relationship and both being willing to invest in it. In a dynamic world, partnership is a way to compete with a greater chance of success and with limited risks.”

Finally: what advice would you give about partnership to aspiring franchisors?

“I would say: start with the basics and select the right entrepreneurs. Make a good analysis of the type of entrepreneur that fits within your business model and company culture. Find the right channels to recruit them and do so with a sustainable story based on a ‘fair deal’ between franchisor and franchisee. As a franchisor, you are expected to be the creative initiator and motivator for the success of the connecting entrepreneurs. But you are also dependent on the franchisee who must be convinced and remain convinced of your added value in good times and bad. This essentially reflects how we at Koelewijn & Partners view franchising in the current context.”