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5 things to look for in a franchisor

5 things to look for in a franchisor

Franchisees need to vet their franchisors before joining. Here are five things they need to look for in a quality franchisor

Franchisors and franchisees have a symbiotic relationship with each other. The franchisor provides the business playbook and supports the franchisee. The franchisee grows the franchisor’s brand and spreads it into new markets. When all goes to plan, this relationship is a win-win.

But no two franchisors are alike. A franchisor needs to have certain qualities for this relationship to work. It’ll make it easier for you to establish their national brand in your local market. Here’s what you should look for in a franchisor before signing on the dotted line.

They have a strong mission, core values, and vision

A great website, a trendy logo, and a cool product or service will only take a company so far. They create a facade with little substance underneath. It’s not possible for a company to survive on these elements alone. To get to the next level, any great company will also possess a mission, core values, and vision to propel it forward. Consumer demand alone can’t do it.

Dig a little deeper than just the company image when you’re vetting franchisors. Read the company’s history and check out their website to get a feel for the brand. Ask yourself: What’s the purpose behind their business? What qualities do they look for in employees? What motivates the company? How do they deliver customer service? If you don’t align with their answers, it won’t be a good fit.

You can’t determine a good fit by only looking at a franchise’s potential for financial success ̶ this doesn’t lead to long-term engagement. It also doesn’t build the brand, especially in their local market. If they want to create a lasting impression in the minds of consumers, brands need to market an experience. A quality mission statement, core values, and vision work together to create this experience.

They have a reliable business model

Becoming a franchise partner lets you immediately lean on an established business model. You’re not forced to go through an extended trial and error process to find out what works — the company has already done this. They present each new franchisee with a company playbook. It’s not a secret formula to success, but it points them in the right direction.

Look at potential franchisors and dissect both the franchise disclosure document (FDD) and franchise agreement. It should include the following:

• How much the franchisee will need to invest
• The required process for starting up and operating
• The type of support and resources available to the franchisee
• A thorough franchise disclosure document (FDD)

Remember that franchise ownership is very hands-on, especially during your first 18-24 months. Even though you’re joining an existing business, it doesn’t mean they’ve done everything for you. As the franchisee, you’re responsible for bringing their business model to life in your local market.

They make resources easily available

The best franchisors provide training, technology, and resources to support their franchisees. They don’t let them go out on their own.

A company’s resources are more than just marketing and training manuals. A company’s relationships with vendor partners could also be viewed as valuable resources for new franchisees. Many existing franchisors have these relationships in place so new franchisees don’t have to establish their own network — they can utilize existing relationships instead.

Another valuable resource is the company’s marketing program. Franchisees don’t have to create a marketing department from the ground up — they can use the national marketing program of an established brand. Oftentimes franchisees will be required to contribute to this program in the form of fees. These directly support the marketing and advertising collateral available to all franchisees in the network. Most smaller franchises will give their franchisees direct access to proven marketing materials and tactics.

Franchisees have this advantage over independent businesses. They are working under a credible, recognized name in the industry while small businesses have to carve out their own place. But franchisees aren’t totally off the hook: they’re responsible for marketing and advertising in their local area. This requires creating a local ad plan and using guerilla marketing techniques to make an impact in the region.

Every franchisee has access to tools and resources the franchisor provides. It starts everyone on an even playing field. But the most successful franchisees implement these tools and resources in their marketplace.

They have an industry presence

When people hear the word “franchise”, they probably attribute it to fast food chains. McDonald’s, Subway, and Pinkberry top the list of the most popular franchises in the world. But franchising isn’t limited to fast food and fro-yo. A growing business in virtually any industry can franchise.

Whether you choose an established or emerging franchise, be sure it has an industry presence. Work for a company that has a stake in the market, and not one that operates in the shadows of more meaningful brands.

It’s also easier to work with a company that has its brand locked down. They know their target audience and how their image is perceived by customers. They also know how their image stands up against competitors in the industry. Franchisees aren’t left wondering how they should market the franchise. They know exactly how the brand is advertised.

They openly communicate with their franchisees

Collaboration is at the core of the franchisor-franchisee relationship. But there needs to be an open feedback loop for it to work. That way franchisees can voice their opinions, challenges, and successes. Not only will this keep the franchisor aware of issues, but it will stimulate discussion with other franchisees.

When you’re looking at potential franchises, take note of where and when they communicate. Which channels does the franchisor use? When are company meetings? Does the business have a Franchise Advisory Council (FAC)? The right franchisor will have open lines of communication, including one-on-one and group meetings.

Do your research before you commit

It’s exciting to become part of a larger brand. You get to use your own experiences and expertise to help a company grow in your local market. But don’t let this excitement blind you from doing your homework ahead of time. Understanding the FDD and franchise agreement are important considerations. You want to understand the amount of investment and requirements on your plate before committing. Otherwise, you risk being put in a position where you’re learning this information on the fly.

Remember that being a franchisee doesn’t mean going it alone. You’ll need the expertise, support, and advice of someone who’s been there before. The road ahead is tough, but it’s easier when someone has your back. Find a franchisor who sees you as their new franchise partner.


Josh Cohen is CEO of The Junkluggers

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