Follow these steps to choose the right franchise opportunity for you!

STEP ONE – UNDERSTANDING FRANCHISING

The franchise business model, which has been around for centuries, has grown rapidly in
popularity, particularly since the 1950s. The reason for the growth in franchising is very
simple: It works.

The Benefits of Franchising

  • A fantastic opportunity to go into business for yourself
  • Access to a business that’s already established successful
  • Provides you with branding, trademarks, marketing/advertising, processes, products, systems, services, operations manuals, a peer group of fellow franchisees and ongoing corporate support
  • Allows you to change careers without starting at the bottom.

Franchising is an Exploding Market

  • Customers trust the quality and service provided by a franchise
  • Group buying power means both the customer and franchisee save money
  • Corporate advertising, computer systems, accounting and sales support improve the business owners chance of success
  • High profile lending institutions recognize franchising as a credible, profitable means for delivering goods and services in many industries
  • It is an extremely efficient manner of delivering a product or service
  • Many new franchise opportunities are created all the time – at the rate of dozens per month!

Several thousand different franchisors exist today in a variety of different industries,
including:

Automotive Building/Construction Business Services
Children Computer Food/Beverage
Health/Beauty Lodging Personnel
Pets Printing Real Estate
Retail Sports/Recreation Travel

STEP TWO – DO YOU HAVE WHAT IT TAKES?

Have you ever wondered if you have the personality and skills to be a successful franchisee?
There are over 2,500 franchise companies operating in the US, each requiring a plethora of
different skill sets in a franchise owner. But there are a few key characteristics that you should
be aware of to determine if franchising could work for you. Are you cut out to be a successful
franchise owner? Consider the following: .

Capital

This is one of the first hurdles you’ll encounter when trying to qualify for a particular
franchise. Most franchisors have a minimum net worth and liquid capital requirement for their
franchisees.

While this may seem obvious, there are other demands on cash availability
beyond the initial costs of the franchise – such as the length of time it will take your business
to start making money and the living expenses you will have during that time. There are
financing options available that may help you qualify if you are short of capital.

Making Connections

A successful franchisee needs good interpersonal skills. Seem obvious? Well think about this
carefully. In your current and past jobs, did you really enjoy working with people?

A franchisee will need to manage employees and work to retain them. You’ll have to build
good-will with your customers and gain their loyalty and trust. In many cases, a franchise
owner’s role will be to make community connections by joining civic organizations and
networking with various groups.

If you are truly a people person, you have one of the most valuable assets to successful
franchise ownership.

Following a System

Many people think being your own boss requires you to be a true entrepreneur, someone
who wants to take charge and challenge each step in the process.

That’s simply not true for franchising. If someone has already done the work, tested the
procedures and proven that a system works, a clever person will pay attention and follow that
system. After all, following a system that works is the essence of franchising.

Willing to Ask for Help

In the same vein, a good franchisee candidate is someone who will let the franchisor help and
support them.

At most franchise companies, there are teams of people who will train you in
every aspect of the business. It is up to you to take the help and follow the advice. When you
are successful, the franchisor is successful

Doing Whatever it Takes

There is just no substitute for hard work, particularly during the first year. A successful
franchisee is someone who is willing to do whatever it takes to get the job done. They put in
whatever hours are necessary to get the job done. They lead their employees by example.

Avoiding Risk

Starting a business by yourself is taking a big risk. Buying a franchise reduces the risk. In fact,
successful franchisees are typically risk averse. They want to minimize their risk as much as
possible and so they choose a strong franchise system with a proven track record.

If you love to take big, bold risks, franchising probably isn’t for you. If you are careful and thorough in your
franchise research so you know just what you are signing up for, then you have the stuff to
triumph as a franchisee.

STEP THREE- KNOW THYSELF

Before you start looking at franchises, take stock of the most important component of the
equation – YOU.

  • What skills, experience and interests do you have?
  • Consider your past jobs and determine what you
    liked best and least about them; then make a list of
    your strengths and weaknesses.
  • How much money can you invest and how much
    would you like to make?
  • Are you comfortable managing others or would you
    prefer to work alone?
  • Where do you want to work? Are you willing to
    relocate?
  • What hours are you willing to work while the
    business ramps up and what lifestyle expectations do
    you have after the business is established?
  • How do you feel about selling and the sales process?

By starting with a list of what you have to offer and what you need from a business, you can
create a strategy and model for your research.

STEP FOUR – INVESTIGATION OF FRANCHISE COMPANIES

 You’ve started this process by understanding what franchising means and how it can help you
own your own business. Next you evaluated whether you have the skills and personality to be
both happy and successful as a franchise business owner.

Finally, you’ve carefully evaluated yourself and built an individual model that can be used to
determine if a franchise opportunity has the components you want.

You know what you need to find in a business to match your preferences and desires. You have a picture of what the future will be like for you as a business owner.

Now it is time to begin looking at individual companies. You can do this on your own by
finding companies on the Internet and doing research, then narrowing down the list to those
that seem to best fit your needs. Another way is to work with a franchise consultant who will
narrow down the possibilities, giving you a short list of companies who match your skills and
requirements.

Keep an open mind.

You may have your heart set on a particular opportunity, such as fast food, only to find you don’t have the financial qualifications and the business won’t provide you with the lifestyle you are looking to provide for yourself. Often a franchise consultant will suggest a company that you’ve never even heard of or would never have considered. Focus on finding the business that’s a great fit for you, regardless of the particular
industry, and you’ll be more likely to experience both success and happiness as a franchisee.

Once you have found some interesting possibilities, the franchisor will provide you with
overview information on the company (typically a brochure and video package). They will
then ask you to provide them with additional information (by filling out a questionnaire) to
determine if you have the general characteristics that they are looking for.

Assuming that each party is still interested based on this information exchange, you will proceed to reviewing the company’s Franchise Disclosure Document, commonly referred to as the FDD.

The FDD is the Federal Trade Commission’s mandated disclosure document that gives you
a wealth of information about the franchisor. The form and composition of the document
is standard with any franchisor and must include information on a variety of topics of
interest to you. The major subject areas include:

1. The history of the franchise and its officers and directors.
2. A complete description of the business to be franchised.
3. All costs and fees that you will be subject to under the agreement.
4. All obligations of either party to the other during the term of the
agreement and thereafter.
5. Any relevant litigation history of the company or its officers. 
6. Any business failures, ownership transfers, franchise agreement
terminations or other potentially adverse information relating to the success rate of
the existing units in the system.
7. Audited financial statements for the previous three years for the franchise company.
8. A list of the existing franchisees.
9. A complete copy of the actual franchise agreement document is usually
attached to the FDD but may be provided under separate cover at the option of the
franchisor.

You should review this document carefully and make sure any questions you have are
answered by the franchisor.

STEP FIVE – FRANCHISE CALLS AND VISITS

The most valuable source of information on any franchise system is the existing franchisees.
You need to plan on calling and, when possible, visiting a number of the existing franchisees
during your investigation.

It sounds almost trite but whatever you find the prevailing attitude of the existing franchisees on any issue to be, it will almost certainly become your attitude on the issue as well if you decide to become a franchisee. Visit with a sufficient number of the existing franchisees to ensure you have a sense of the prevailing attitudes of the group.

Though you want to find the overwhelming majority of franchisees to be happy and supportive
of the franchisor, it is important to try to find an unhappy franchisee during your investigation.
When you do, not only listen to the complaints but also try to determine what makes this
franchisee different from the rest.

If you find you identify with the positive ones and feel the negative franchisee is not at all like you, then you should be fine. If you find that you are more like the person who is unhappy however, this is probably not the right franchise for you.

STEP SIX – MEET THE FRANCHISOR

If everything looks good up to this point in the process of investigation, you will want to
have personal meetings with key personnel of the franchise company.

This might be possible in your local market or you may need to travel to the headquarters of the franchisor.

Many franchisors facilitate this need by holding what are referred to as a “Discovery Day.”
This is a structured event where you can go to a specified location and know that all of the
key people from the franchisor will be available.

Be sure to get to know those people you will be working most closely with in the building of
your business. We would expect the President of the company to be an impressive person but
that’s not who will be answering your call when you have a problem. Find out who will be
providing the operational support and training directly to you and form an opinion about their competence. Make sure that any remaining questions or issues you may have are addressed at this meeting.

STEP SEVEN – MAKE A DECISION

If you have been diligent, the entire process outlined above should have taken about two to four
weeks to complete.

You have now finished your investigation and have all the information you need to determine if this franchise is right for you. It either is or it isn’t, and you’ll know which it is.

In either case, it is time to make a decision and move on. Use the model you developed
for yourself to evaluate what you wanted in a business. Don’t settle.

If this company has everything you wanted, do it. If it doesn’t, eliminate it and go on to the next one.

Are you ready to take control of your life?

Tom Hannon

Franchise Consultant

If you are what I call a corporate refuge or someone who has had enough of the corporate life and would like to explore being in business for yourself through franchising, you should book a call to discuss our service. Our initial call is a short. It’s a chance for you to tell me your story and share your goals. Then we will decide if we will be a good fit to work together.

This  is the first step in our signature 4-step process to find you the perfect franchise! 

Book A FREE call today to see how I can help you.

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