John and Bill Fotiadis, the founders of franchise fast-food chain Souvlaki Hut, have taken a novel approach to franchising, but their franchisees couldn’t be happier. They explain why they are pushing ahead with expansion despite the downturn.

The downturn is a frightening time for franchisees and particularly prospective franchisees. Logic says that franchisors need to be reassuring, compassionate and understanding.

But John and Bill Fotiadis, founders of franchise fast-food chain Souvlaki Hut, are taking a very different approach with their franchisee candidates.

“We like to scare them,” Bill says.

“We really push them in the interview process. We ask them: ‘What if you lose your money?’ and ‘What if you lose your house?’”

The pair say the approach has probably slowed the growth of their business – in 2006, they knocked back 28 candidates after the interview products.

“For us it was the equivalent of $1 million worth of franchise fees, but we need the right people,” Bill says. Read full story.