A competent board of directors or advisory board can be an
invaluable resource for a franchisor. In the case of small or
medium sized franchises, having advisors from outside the franchise
offers the opportunity to receive advice that is objective and
based on experience.
Some business owners prefer to have an advisory board rather
than a formal board of directors (which has more power than an
advisory board. Since a board of directors is a legal body,
franchisors should understand the differences between the two types
of boards and consult their attorney before choosing which one to
Profile Board Candidates:
- Target areas in your franchise where you need strengthening,
such as franchise operations, finance, marketing etc.
- Consider a broad range of candidates, including attorneys,
CPAs, fellow executives and educators. Include people with
franchising experience and from your business sector. In other
words, people with experience and skills that are different from
- Avoid friends and family members on a Board especially if they
lack the credentials. They may be unwilling or uncomfortable
providing honest feedback and advice.
- Decide how often the Board will meet. Most Boards meet on a
quarterly basis. The frequency of meetings could be a factor when
candidates decide whether or not to join a Board.
- Membership terms for a Board of Directors typically run from
one to three years with staggered terms.
- Expect to pay your Board members a modest fee per meeting,
depending on the size of the franchisor. Advisory Board members
without legal responsibilities should receive less. Some members
may be willing to serve without receiving a fee since there is a
degree of prestige when serving on a Board.
Be objective and honest when identifying the type of candidates
you would like to have as a resource. Consider them as business
advisors who can help develop strategies, analyze and critique
performance and be a valuable resource and sounding board for the
Finding the Board Candidates:
- Speak to business associates, the Chamber of Commerce and trade
associations for recommendations.
- Review academic institutions for talent especially if a local
college or university has a business school.
- Check your local media as a source for candidates since they
may be familiar with business leaders from your market.
Choosing people for a Bboard of Directors or Advisory Board is
the most important part of the process. Add people who are
influential in your industry or market area – those who provide
competent advice and add credibility to the franchise.
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