Choosing the Right Franchise: What (and Who) to Ask
The franchise industry offers excellent opportunities for entrepreneurs seeking to go into business for themselves, but, with so many franchisors to choose from, how do you find the right one? It is important to know the right questions to ask.
What kind of business do you want?
Before signing on the dotted line, potential franchise owners need to ask themselves some very important questions. What kind of business do they want?
Many potential franchisees do not want to buy a “job,” and they do not want a business that makes it difficult for them to take time off. They want a business they can work on instead of being stuck operating alone as a man/woman-in-a-van type of franchise or in a work-from-home franchise. In this case, it’s important to find a franchisor that can give them a business that can provide the lifestyle, freedom and financial reward they want.
The best franchise entrepreneurs are those who want to be in business for themselves — but not by themselves. Franchise entrepreneurs embrace the support, systems, processes and framework that come with joining a proven successful franchise business format.
What market do you want to serve? Does the franchise offer a unique service? Sure, there is always a new way to present a pizza, but you must ask yourself if that market already saturated. What value proposition does the franchise offer?
How much does the franchise cost?
What is the cost of entry for the franchise business model? Is it relatively low compared to other franchise opportunities and can it produce the revenue you want from your business? Do they offer veteran discounts on the franchise fee? Do you fully understand what it will cost to grow a successful business so you can plan for your financial goals? Ask the franchisor how they plan to support you in raising the capital to start and grow your new business. Partnering with the right franchisor can allow you to build businesses just as large and successful as those that cost much more.
How much marketing does the franchisor do?
Ask yourself, do you want a business where you have to aggressively sell or would you prefer a business where marketing can make the phone ring. New business owners, current business owners and independent operators can benefit greatly from joining a franchise with a powerful marketing program. Instead of having to knock on doors to generate sales, the right franchise opportunity can start the phone ringing immediately.
What is your end game?
All too often, new franchise owners are so focused on getting started in their new business that they do not consider their end game. At some point you may want to reap the rewards of a business whether you want to sell it for as much money as possible, have it managed for you and continue to produce income, or to leave a legacy for a family member. Does the franchise system help when you are ready to sell?
What does the internet say about them?
These days, due diligence about a franchise network begins on the internet. Research. Research. Research. Is the corporate website for the franchisor well-designed? Does it provide useful information? Check out social media platforms such as Facebook and LinkedIn to educate yourself about the public perceptions of the franchise. Investigate how the franchise is leveraging social media to help support their franchise owners.
Do they have a Discovery Day?
To find out about a franchise network, it is important to meet with the leadership directly. A Discovery Day is the best opportunity for potential franchisees to directly learn about the people who will be supporting them. It’s important to meet in person, shake hands, and look a person in the eyes to learn about them. Entering a business relationship can be much like deciding to get married. It is one of the most important decisions of your life. Spend as much time together beforehand as you can to determine if you can really work together for the long term.
Who else should you talk to?
The best people to learn from about a franchise opportunity are those who own the franchises. Talking to someone who already bought into a franchise network can be highly educational. Be sure to respect the time and willingness of a franchise owner to speak to you. They’re trying to make a living and are giving you time out of their own good will.
Check if the franchise system has been recognized for any industry awards that may speak to the quality of the brand or its success. Partnering with a successful franchise can provide the opportunity for financial success, but not all franchisors are created equally. The best franchises enable owners to enjoy an excellent lifestyle of financial security and an appropriate home/work balance.
Gwyn O’Kane is Vice President of Franchise Development for Miracle Method Surface Refinishing, the nation’s largest bathroom and kitchen surface refinishing franchise with opportunities available nationwide.