The process of finding the franchise concept that’s perfect for you can be overwhelming. You need to find something to be passionate about; something that can bring you not only financial success but immense satisfaction, too. But how do you start narrowing down the overwhelming number of opportunities out there? Here are some helpful tips to consider when weighing the options
What is the most important thing I should be looking for?
One of the most important criteria to consider is cultural fit. Find a concept that has a culture of doing business that is a good fit for you. Industries, products, services are all about how you and/or your team spend the day, but culture is about the lifestyle you want and the company you surround yourself with. Ask yourself, does the company have my best interest at heart?
There are so many franchises, how do I know which one is the best?
The reason folks look for a franchise business is very personal, but the criteria that makes a franchise system successful is fairly straight forward. No matter the industry, the success of a franchise concept can most easily be seen in the proof of concept or in its history. Ask yourself the following questions: Does the franchisor have a clear understanding of the industry as evidenced by its own operation? Does the concept have enough faith in its programs and processes to operate the business themselves? What does the franchisor do that sets this concept apart from the competition? Strong systems started as strong concepts where the evolution of the brand has allowed the franchisor to live through the costly mistakes of a start-up business so you, the franchisee, do not have to.
How do I know if I’m ready to jump into business ownership through franchising?
Self-reflection and an honest look at your level of preparedness are key before searching for a franchise business. Ask yourself, do you have the capital to make the investment and keep enough cash to stay safe? Do you have the time and energy to fully commit to the success of your business by following the proven process of a franchise? What’s your passion? What are your short and long-term goals?
How do I set my expectations for starting a new business?
Most business start small and set you up for long-term success. Looking for a concept you can grow with is important. Understanding both your wants and needs is a good place to start. If you need to pay your mortgage with the money you earn in your first month of business ownership, perhaps you should rethink your path. Set yourself up for success by taking a conservative approach to business evaluation which will lead to meeting and exceeding goals and keeping yourself safe as you begin your new journey.
What are franchisees saying about the franchisor?
One of the best ways to get a feel for a day in your new life as a franchisee is talking to the people living that journey already. There are lots of questions for existing franchisees including relationship with the franchisor, support, and training from HQ but maybe the most important question to ask is, “would you do it again?” Be sure to talk to a variety of existing owners as there is no system that is perfect for everyone and you don’t want to make a snap judgement from talking to one franchisee who may have not done the due diligence you are doing.
What’s the failure rate?
Franchisors can often spin closures as the fault of lazy franchisees who didn’t follow the system. Though some of that can be true, high percentage of closures should be a big red flag.
What support is offered beyond the initial training?
Franchisors love to brag about their sizzle; the amazing teams, the elaborate Discovery Days, and their “unrivaled” week or two of initial training. But opening is not the final destination; what happens after that? What are the programs and processes set up for ongoing support? Who is the team? Ask these questions to ensure your franchisor won’t disappear once you’ve started.
What systems does the franchisor have for keeping in touch with you and franchisees in touch with each other?
Back to the culture and support topics. Don’t be afraid to ask the “how”. What does the franchisor provide for opportunities to connect with the rest of the system and to the support team? How can you learn best practices from those more seasoned operators? What opportunities are provided to unite the system to enjoy the culture you so carefully selected to be a part of?
How did the franchise get started and what is the background of the executives?
Who were the founders? Are they still involved? What were their goals in starting the business? You should know some of the “origin story” and understand the full grasp the franchisor has on the operations of the business. Were the programs and processes built from theories or from life in the trenches? You should feel the franchisor has adequate experience and that you and your skill sets align with theirs.
What is the criteria for choosing a new franchisee?
Franchisors typically are looking for a specific type or types of franchisee. Most franchisors have a list of qualifications and personality traits that fit best with their brand ethos and allows them to award franchises to those they believe they can set for success as well as keep the brand safe. It’s important to understand those criteria to determine whether you feel your personality and skill set fit within the system as well as have a general feel for who your fellow franchisees will be.
How much do I have to invest before I can open my doors?
The total and initial investment for starting a franchise can vary from a few thousand dollars to a few million, from concept to concept. Understanding the numbers provided in the Franchise Disclosure Document (FDD), talking to franchisees, and working through your own evaluation will give you some good assumptions of what you will need. Discuss these costs in depth with the franchisor so that you have a clear understanding of your investment and can plan your funding to keep you and your investment safe and well-financed.
What sets the brand apart from the competition?
Some franchise brands operate in highly competitive markets and industries and others are more niche and unique. Where does the brand fall? Who are the direct and indirect competitors? Be sure to understand their unique selling points and their advantages over the competition so you know what to expect as an operator.
The search for the perfect franchise can be overwhelming but with patience, commitment, and an open mind, anyone can find the perfect fit. Like all relationships, getting to know each other is key; spend the time, ask as many questions as you need to so that you feel comfortable and make a decision based on both the head and the heart. Happy hunting!
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