People often ask, how much does engaging with an executive search process cost? This typically generates two conversation streams, Executive Search and Recruiting. In this article, we will touch on franchise executive search.
Franchise Executive Search
Franchise Executive search is typical for brands that have emerged in the franchise space or are medium to large-size brands with at least fifteen corporate office team members. Executive search is a longer recruiting process than a typical recruiting engagement. It involves a deep dive with multiple team members to understand the organization and cohesively establish a strategy to address the strengths and weaknesses of the current organization. This may involve key team members or a formal search committee.
150K Plus Salary & Title
The tipping point of what could shift a search into the “executive” category is the base salary. Traditionally franchise executive search is for roles that have at least one hundred and fifty thousand base salary plus other compensation components. The title will also play a role as the higher a traditional organizational chart you go the less candidates that might exist within that pool. This will make this type of search more difficult.
Franchise Executive Search firms each have their own formula for the interview process. It can range from three interviews up to six. The interviews can be 45 minutes up to 4 hours long. There is no secret sauce or perfect formula. However, at the end of the process, all parties should feel confident the person selected is the right fit for the franchise organization and has the character, skills, and EQ to achieve the goals set forth in the discovery process.
In our article Is Recruiting An Investment Or An Expense we argue that the use of recruiting services to find your next hire is an investment into your existing team and the candidate themselves. For purposes of this article, let’s use the most common term cost. What is the cost of working with an executive search firm? We have seen two schools of thought, the first being a retained search agreement with a minimum fee of 100K. Keep in mind this C-level executive at franchisors with over five hundred plus units. A mistake playing at this scale could be very costly. The second school of thought is a percentage of first year’s compensation package. This fee we have seen ranges from 25% to 40% of first year’s compensation with a portion typically being paid upfront as a retainer.