Narrowing Your Franchise Search
Narrowing Your Franchise Search
This is an important exercise. If you don't narrow your search you will likely be overwhelmed with information once you begin to do heavy research.
A few key things about yourself
Your Investment
If you have carefully gone over your own financial information, you should know exactly how much you want to invest as well as the highest possible number that you can afford to invest. Keep in mind that you will need start-up costs, franchise fees, back-up funds, and enough to live on without an income for at least one year, most likely two. You should end up with a range from the ideal to the highest possible. Only investigate franchises that fall within your range.
Your interests and goals
If you have worked in education your entire career and your goals include working on a more focused area within early childhood education, a muffler shop is probably not going to meet your needs. Be clear about which industries interest you. If you have thought about working in an industry before, even if you have no experience in that industry, that might be something to consider. If your goals include working with a particular group of people, or offering services rather than selling products exclusively, look for franchises that will meet those needs. Remember that you may be doing this job for the next 20 years-be sure it is something that you will enjoy doing.
Your skills and abilities
Matching your own skills and abilities to the right kind of franchise is an important consideration. If you don't have the skills or abilities required to perform the work, consider whether you can get the skills through training. If you aren't sure, this isn't the right industry for you. Consider that you are your own boss and that if your employees have some kind of emergency, you have to let go of employees to cut costs, or any other situation arises in which you would have to complete the work, could you do the job?
Once you have considered these things you should have a rough roadmap of the appropriate industries, the types of franchises, and the right investment level for you. The next step in narrowing your search is to gather information on the franchises that might fit the bill.
Finding out about the franchises that might suit your needs
There are many ways to go about compiling a list of possible franchises that meet the above criteria. Websites, business journals, industry awards, and franchise exhibitions are probably the best way to look into which franchises are out there. Take some time to explore what is on the market, what's hot, and where the currents trends are. Keep a journal or notebook of possible interests. If you visit a franchise location for personal reasons and are impressed by what you see, consider that a franchise worth exploring.
Franchise exhibitions range from single franchises in a small setting to entire exhibitions with a wide range of franchises exhibiting together. Keep that journal or notebook handy and take notes. Beware of any franchise salesperson who is pressuring you for a once-in-a-lifetime opportunity that won't be around tomorrow. Experienced franchisors are looking for franchisees that will be successful and invested in their brand; if the salesperson is telling you that it is a good fit and you don't think so, walk away. Remember that this is your investment and you are looking for the right business opportunity to fit your goals. Only you know what the right fit will be.
Before you take the next step, you should have a pretty good list of franchises that meet your goals, that you can afford, that do the kind of work you are interested in doing, and that you think might suit you. Narrowing that list of possibilities to true prospective opportunities involves a great deal of research, but will yield the rewards of making a good, informed choice for one of the most important investments you will ever make.
Narrowing the search from possible to probable
Ask yourself and the franchisor these questions. Make sure you both understand how the answers would impact you if you were to become a franchisee and also how comfortable you are with the responses.
Demand
How much demand is there for this type of product or service? Is this likely to be a product or service that will still have a high demand in ten years? Is this a trend-setting company or a trendy company? Can you evolve this business over time so that the demand for goods and services stays consistent and strong?
Competition
How much competition exists for the goods and services offered? Is the market flooded for this particular industry? How about for this franchise? If there is an extremely high number of franchises, it is likely that the competition between individual units exists to some degree as well. What is their market penetration?
Brand recognition
Newer and smaller franchise organizations may not have as high a level of brand recognition as more establishes franchises. If you feel it is a franchise that has the potential to grow and think you may just be getting in on the ground floor, that isn't necessarily a bad thing. Newer and smaller franchises may offer you more flexibility, but they may also not be able to offer the support services at the same level a larger franchise can. Franchises that grow too fast can be stretched thin. Be sure you're comfortable with the risks associated with a smaller franchise. On the other hand, if the franchise has been in business for a long time and still doesn't have much name recognition, ask yourself why not? Look at their growth and projections and their financials to determine the strength and goals of the franchisor.
Training and support
What kind of training and support does the franchisor offer? Is there an associated cost? What kind of continued training and support do they offer after you've opened your doors? If you have problems, who would you call? Is there someone available for a site visit to help you rectify operational difficulties? Do they offer the initial training that will bring your skills and abilities up to a level that you feel will set you up for success?
Expertise
How much experience does the franchisor and his/her staff bring to the table? Does the franchise as a whole have more experience in entrepreneurial endeavors or in franchise management? How many different kinds of experience and expertise will be available to both the franchise as a whole and to you as a franchisee?
Growth
How much growth potential is there for this franchise? For this industry? Is there a projected growth plan that you feel is reasonable? Growing too fast or too slow can both be bad situations in business. You want to look for a franchise that has a reasonable and consistent growth plan, can show you that they have been meeting their planned growth, and that can manage the growth to everyone's best interest.
Compare
There is definitely more than one franchise offering a similar product within the same industry. Compare what they all have to offer. You may be able to get a better deal from another franchisor, so don't settle for the first probable franchise in line. When you're comparing similar franchises, look for things like start-up costs, royalties, inventory, territory, stability and growth, and how much ongoing training and support they each offer.
Substantiated earnings
If a franchisor offers you information on your earning potential be absolutely positive that they also offer you proof substantiating their projections. This is a requirement from the FTC. If the franchisor does not have proof or is unwilling to give it you, run.
Investigating the probable options
You've narrowed your list. You think you know which franchise you want to invest in, and you're ready to investigate more thoroughly exactly what that franchise is offering. This is the point at which you look at their documentation and talk to their existing franchisees to make some very important determinations. You're close! You've done a lot of hard work and research to get to this point, so don't stop now. The final investigation of the couple of franchises you are considering will tell you exactly what you'll get for your money and whether it is a good investment for you. The Franchise Offering Circular, also known as the Disclosure Statement, is the place to begin. You will get the information you need to finalize your investigation from this document-though by no means through just what is IN the document.
Professional Advice
When all is said and done, you have researched and investigated to your wit's end and have made some decisions, get a second opinion. There is nothing like professional advice to back up your decisions. A Franchise Attorney and an Accountant with experience in franchise businesses are essential. Don't try to extract and digest all of the information presented to you yourself.
Franchise attorney
You need a franchise attorney to review any contracts or documents and explain to you exactly how they will impact you. A good attorney will know the nuances that will most surely not occur to you at all-after all, they're attorneys reading other attorney's work.
Accountant familiar with franchise businesses
Having an accountant familiar with how franchise businesses operate is essential to your investigation into the financial stability of your investment. This person can look at the financial statements and tell you whether this is a strong company or if the franchise is risky and attempting to show themselves out in the best possible light.
Banks and credit
Review any loan offers or agreements with your own banking institution. You may be able to get a better deal somewhere else. If you can get a credit report on the franchise to see how well they manage their debt this would be ideal.
Other resources for checking out any complaints against the franchisor or the brand, or to verify the status of a franchise, would be the Better Business Bureau and the Federal Trade Commission.
Narrowing your search is critical. We've just outlined a litany of items that you'll need to consider. To do this for every franchise you think you might be interested in is more work than you'll need to do.
Narrow your search early, and continually, so that all of your efforts are spent researching deeper into the very best prospective companies.
Narrowing Your Franchise Search - To learn more about this author, visit Bob Richman's Website.
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There are more franchises out there than you would ever imagine. Finding the right one for you will take some time, research, and contemplation. Start by considering a few key things about yourself, and then limit your explorations to companies that meet your goals and interests, fit into your budget, and that you have the ability to operate successfully. Once you have that initial list, start narrowing your search by reviewing some key information about the franchisors you are considering.
This is an important exercise. If you don't narrow your search you will likely be overwhelmed with information once you begin to do heavy research.
A few key things about yourself
Your Investment
If you have carefully gone over your own financial information, you should know exactly how much you want to invest as well as the highest possible number that you can afford to invest. Keep in mind that you will need start-up costs, franchise fees, back-up funds, and enough to live on without an income for at least one year, most likely two. You should end up with a range from the ideal to the highest possible. Only investigate franchises that fall within your range.
Your interests and goals
If you have worked in education your entire career and your goals include working on a more focused area within early childhood education, a muffler shop is probably not going to meet your needs. Be clear about which industries interest you. If you have thought about working in an industry before, even if you have no experience in that industry, that might be something to consider. If your goals include working with a particular group of people, or offering services rather than selling products exclusively, look for franchises that will meet those needs. Remember that you may be doing this job for the next 20 years-be sure it is something that you will enjoy doing.
Your skills and abilities
Matching your own skills and abilities to the right kind of franchise is an important consideration. If you don't have the skills or abilities required to perform the work, consider whether you can get the skills through training. If you aren't sure, this isn't the right industry for you. Consider that you are your own boss and that if your employees have some kind of emergency, you have to let go of employees to cut costs, or any other situation arises in which you would have to complete the work, could you do the job?
Once you have considered these things you should have a rough roadmap of the appropriate industries, the types of franchises, and the right investment level for you. The next step in narrowing your search is to gather information on the franchises that might fit the bill.
Finding out about the franchises that might suit your needs
There are many ways to go about compiling a list of possible franchises that meet the above criteria. Websites, business journals, industry awards, and franchise exhibitions are probably the best way to look into which franchises are out there. Take some time to explore what is on the market, what's hot, and where the currents trends are. Keep a journal or notebook of possible interests. If you visit a franchise location for personal reasons and are impressed by what you see, consider that a franchise worth exploring.
Franchise exhibitions range from single franchises in a small setting to entire exhibitions with a wide range of franchises exhibiting together. Keep that journal or notebook handy and take notes. Beware of any franchise salesperson who is pressuring you for a once-in-a-lifetime opportunity that won't be around tomorrow. Experienced franchisors are looking for franchisees that will be successful and invested in their brand; if the salesperson is telling you that it is a good fit and you don't think so, walk away. Remember that this is your investment and you are looking for the right business opportunity to fit your goals. Only you know what the right fit will be.
Before you take the next step, you should have a pretty good list of franchises that meet your goals, that you can afford, that do the kind of work you are interested in doing, and that you think might suit you. Narrowing that list of possibilities to true prospective opportunities involves a great deal of research, but will yield the rewards of making a good, informed choice for one of the most important investments you will ever make.
Narrowing the search from possible to probable
Ask yourself and the franchisor these questions. Make sure you both understand how the answers would impact you if you were to become a franchisee and also how comfortable you are with the responses.
Demand
How much demand is there for this type of product or service? Is this likely to be a product or service that will still have a high demand in ten years? Is this a trend-setting company or a trendy company? Can you evolve this business over time so that the demand for goods and services stays consistent and strong?
Competition
How much competition exists for the goods and services offered? Is the market flooded for this particular industry? How about for this franchise? If there is an extremely high number of franchises, it is likely that the competition between individual units exists to some degree as well. What is their market penetration?
Brand recognition
Newer and smaller franchise organizations may not have as high a level of brand recognition as more establishes franchises. If you feel it is a franchise that has the potential to grow and think you may just be getting in on the ground floor, that isn't necessarily a bad thing. Newer and smaller franchises may offer you more flexibility, but they may also not be able to offer the support services at the same level a larger franchise can. Franchises that grow too fast can be stretched thin. Be sure you're comfortable with the risks associated with a smaller franchise. On the other hand, if the franchise has been in business for a long time and still doesn't have much name recognition, ask yourself why not? Look at their growth and projections and their financials to determine the strength and goals of the franchisor.
Training and support
What kind of training and support does the franchisor offer? Is there an associated cost? What kind of continued training and support do they offer after you've opened your doors? If you have problems, who would you call? Is there someone available for a site visit to help you rectify operational difficulties? Do they offer the initial training that will bring your skills and abilities up to a level that you feel will set you up for success?
Expertise
How much experience does the franchisor and his/her staff bring to the table? Does the franchise as a whole have more experience in entrepreneurial endeavors or in franchise management? How many different kinds of experience and expertise will be available to both the franchise as a whole and to you as a franchisee?
Growth
How much growth potential is there for this franchise? For this industry? Is there a projected growth plan that you feel is reasonable? Growing too fast or too slow can both be bad situations in business. You want to look for a franchise that has a reasonable and consistent growth plan, can show you that they have been meeting their planned growth, and that can manage the growth to everyone's best interest.
Compare
There is definitely more than one franchise offering a similar product within the same industry. Compare what they all have to offer. You may be able to get a better deal from another franchisor, so don't settle for the first probable franchise in line. When you're comparing similar franchises, look for things like start-up costs, royalties, inventory, territory, stability and growth, and how much ongoing training and support they each offer.
Substantiated earnings
If a franchisor offers you information on your earning potential be absolutely positive that they also offer you proof substantiating their projections. This is a requirement from the FTC. If the franchisor does not have proof or is unwilling to give it you, run.
Investigating the probable options
You've narrowed your list. You think you know which franchise you want to invest in, and you're ready to investigate more thoroughly exactly what that franchise is offering. This is the point at which you look at their documentation and talk to their existing franchisees to make some very important determinations. You're close! You've done a lot of hard work and research to get to this point, so don't stop now. The final investigation of the couple of franchises you are considering will tell you exactly what you'll get for your money and whether it is a good investment for you. The Franchise Offering Circular, also known as the Disclosure Statement, is the place to begin. You will get the information you need to finalize your investigation from this document-though by no means through just what is IN the document.
Professional Advice
When all is said and done, you have researched and investigated to your wit's end and have made some decisions, get a second opinion. There is nothing like professional advice to back up your decisions. A Franchise Attorney and an Accountant with experience in franchise businesses are essential. Don't try to extract and digest all of the information presented to you yourself.
Franchise attorney
You need a franchise attorney to review any contracts or documents and explain to you exactly how they will impact you. A good attorney will know the nuances that will most surely not occur to you at all-after all, they're attorneys reading other attorney's work.
Accountant familiar with franchise businesses
Having an accountant familiar with how franchise businesses operate is essential to your investigation into the financial stability of your investment. This person can look at the financial statements and tell you whether this is a strong company or if the franchise is risky and attempting to show themselves out in the best possible light.
Banks and credit
Review any loan offers or agreements with your own banking institution. You may be able to get a better deal somewhere else. If you can get a credit report on the franchise to see how well they manage their debt this would be ideal.
Other resources for checking out any complaints against the franchisor or the brand, or to verify the status of a franchise, would be the Better Business Bureau and the Federal Trade Commission.
Narrowing your search is critical. We've just outlined a litany of items that you'll need to consider. To do this for every franchise you think you might be interested in is more work than you'll need to do.
Narrow your search early, and continually, so that all of your efforts are spent researching deeper into the very best prospective companies.
Narrowing Your Franchise Search - To learn more about this author, visit Bob Richman's Website.
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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John AlexanderJohn has taught keyword research and SEO skills to small groups of business owners and Webmasters from over 80 different countries world wide since 2002. John is also the Director of Search Engine Academy ; Co-director of Training at Search Engine Workshops offering live, SEO Workshops with his partner SEO educator Robin Nobles, author of the very first comprehensive online search engine marketing courses at SEO Training Online and the SEO Workshop Resource Center. I look forward to hearing from you! - Visit John Alexander's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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Jay Kubassek(Jay's Full Bio: EvanCarmichael.com/jaykubassek) In five years, Canadian-born entrepreneur Jay Kubassek went from selling mufflers at a Midas franchise to revolutionizing Internet marketing with the 2004 launch of CarbonCopyPRO, a online marketing education company, now worth over $20 million with customers in over 160 countries.
As an independent film producer, his upstart film fund Aliquot Films is currently producing a films with Spike Lee and Abel Fererra (starring Ethan Hawke and Dennis Hopper.)
Jay's entrepreneurial spirit is irrepressible. He’s the owner of five companies, a professional speaker and trainer, international real estate developer/investor, extreme sport enthusiast and emerging philanthropist. Jay resides in NYC with his wife Jamie, son Milo and dog Cooper. Visit Jay's official website: www.JayKubassek.com - Visit Jay Kubassek's Website |
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Stephanie RobeyStephanie Robey is President and CoFounder of Pivot Positive, LLC - an Internet marketing business focused on helping people start work at home ventures. Previously, she was employed at The Search Agency with over 20 years experience in graphic design and 10 years experience in online marketing. She was responsible for launching the Conversion Path Optimization (CPO) unit where she and her team have conducted hundreds of optimization tests for online companies across multiple verticals. She is a successful entrepreneur having started and sold 2 companies and remains on the board of directors of the third, PhotoSpin.com Stephanie began her career in the direct marketing realm creating and producing direct mail for many of the major cable television companies and directly attributes her understanding of Internet marketing to those early offline experiences. Stephanie is a graduate of San Diego State University with a BFA in Graphic Arts and also holds an Executive MBA from the Graziadio School of Business and Management at Pepperdine University. Read Steph's Blog Meet Steph and Dave Sign up for our Free 7-Day BootCamp: Self Employed & Rich - Visit Stephanie Robey's Website |
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