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Challenging the franchise norms — algorithm over intuition in franchise matching

With ten years on the job, Seth Lederman of Frannexus has matched countless investors with their franchises.

Photo courtesy of Seth Lederman
Photo courtesy of Seth Lederman

Opinions expressed by Digital Journal contributors are their own.

With its low barrier to entry, a high success rate, and a built-in support system, franchise ownership is one of the more appealing business ideas on the market today. For some, it’s a way to get out of their corporate job and go into business for themselves with a premade plan. For others, it’s a way to diversify their portfolio, investing in owning a franchise rather than putting their money on the stock market.

No matter why people decide to own a franchise, one thing’s certain — they’ll have plenty of different options. Close to 300 various industries offer franchise opportunities, the US Census Bureau reports, so there’s more than enough to choose from.

The variety can, however, quickly become a problem. Not every owner is well suited for owning a particular type of franchise, regardless of their wishes. Matching the owner and the franchise is one of the critical reasons franchise consultants are such an essential factor in the whole process.

Photo courtesy of Seth Lederman

With ten years on the job, Seth Lederman of Frannexus has matched countless investors with their franchises. His preferred method, however, is a bit unorthodox.

“We represent a portfolio of franchise brands, and we match investors with franchises that will suit their personal, professional financial goals and objectives,” Lederman explains. “It’s a very algorithmic approach that’s extremely methodical and efficient in helping them navigate what is insurmountable for a lot of people because there’s just too many options, and they don’t know what they don’t know.”

After narrowing down the options, the team and Frannexus will help his clients go through the due diligence process, leading to the acquisition of a franchise. But the algorithmic part brings fresh air — or a jolt of electricity — into the profession.

Collaborating with Frannexus starts with clients submitting a confidential questionnaire and psychometric assessment. Those data are then complemented with information about skills, qualifications, and interests to create a unique picture of the client that could be compared with different franchises for compatibility.

In some cases, people will be matched easily. Others will be notified that Frannexus doesn’t consider them a good candidate. Either way, the decision will be the product of not just someone’s gut feeling or the candidate’s desire but a rigorous process that puts data and information first and intuition second.

“There’s a lot of great businesses, and people need to have options and choices that all resonate,” says Lederman. “But they need to check the boxes they need to have checked so that they’ll only be looking at opportunities that make sense for them to look at in the first place. And the process of elimination will take care of the rest.”

For Lederman, his company must stay on the leading edge of technology while retaining a way to benefit from all the experience he gathered over his ten years in the industry. Their algorithmic approach might be more efficient and precise than the traditional, but there’s no denying that there’s a wealth of experience human consultants bring to the table. Just as long as it’s clear that the future is in data and the algorithmic approach — and franchising.

“I think people should explore all their options. And when they do, they’ll recognize that the likelihood of a successful outcome will be in business ownership versus any passive investment because they have no control over it. At least the business is their business,” he concludes.

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Jon Stojan is a professional writer based in Wisconsin. He guides editorial teams consisting of writers across the US to help them become more skilled and diverse writers. In his free time he enjoys spending time with his wife and children.

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