How to work with the best franchisesIt is always best to be prepared at the begining
There are over 5,000 (50% have 20 units or less) franchises in the United States. Nearly every day a new one hits the market. Some will be empire brands and others will be emerging.
Your job as you look through all the opportunities is to really ask yourself what your goals are. You must have a clear picture of what success looks like for you.
Often times, people are looking at concepts they think they want but don’t really align with their financial situation or desired lifestyle.
The most important thing you can do is to keep an open mind and look at proven results.
Could you imagine yourself in the position? How would owning this franchise impact your lifestyle? This simple technique may open you up to concepts that you may not have even considered.
There is no "PERFECT" franchise for anyone. The right option is the one that fits your goals, lifestyle and desired work culture.
Just because you want to purchase a franchise they don't have to accept you.
You must be awarded the franchise. That is why it is so important to be prepared before any interaction with any franchise system. All too often people try to impress the franchisor and end up being denied.
Don't let this happen to you. We will prepare you every step of the way.
Lesson 5: Properly vetting franchisesFocus on quality brands with a proven track record
A franchise is supposed to be a proven system - something that has been done successfully before and can be replicated. Obviously, The caliber and quality of franchises will be different across the board. The person you’re working with should ALREADY know which franchises are winners and which ones are the stinkers.
You may want to be wary of someone who says they personally represent 500+ franchises.
The odds are they have no idea how to truly validate these businesses. More is not better in most cases. If someone is claiming to represent 500 franchises, there are sure to be some bad apples in there.
As you are introduced to franchises, ask yourself…
- How has the person I am working with really validated all of the concepts they claim to represent?
- Have they passed that responsibility onto someone else?
- What are their standards? Can they prove it?
There are over 5,000 (50% have 20 units or less) franchises in the United States.
Nearly every day a new one hits the market.
Lesson 6: Diving into the Franchise Disclosure Document
Every year franchises are by law required to report on their successes and failures. This is for your protection and can be found in the Franchise Disclosure Document (FDD).
Getting into and understanding a 300 hundred page legal document, knowing what warning signs are, knowing what is normal and not normal, and understanding how and why they are presenting the data the way they do is not something you learn overnight.
Even the most successful business people struggle with deciphering the data within an FDD.
Many potential disasters can also be avoided by having a franchise attorney review a franchises FDD. They are prepared on what to look for far better than a typical attorney.
Additional ways you can get the real story
The answers are often hiding in plain sight. Here are some of the ways to go about getting these answers.
- Conduct multiple interviews with existing franchisees
- Understand your target market based on facts
- Have an actual franchise attorney review the Disclosures (FDD)
- Understand how the franchise compares to other similar franchises