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Top 5 Things To Look For When Researching Franchises

Guest post by: Anne Barr

Article Overview: Top Five items people should look for when researching franchise opportunities.

Top 5 Things To Look For When Researching Franchises

Here are the top five items I tell people to look for in my seminars and in person when consulting with people trying to "find the right" fit in a franchise. 1. Understand your personality and choose a concept that matches your skills and interests as closely as possible. Know your strengths and weaknesses and make sure your family and co-workers would agree with your own assessment of same. When doing your research and talking to existing franchisees, be sure to find out "who is most like you" from background experience and personality and work ethic.

2. Study the Franchise Disclosure Document and then study it again. Get your questions answered by the Franchisor and also consult a Franchise attorney to assist you in reviewing the document and identifying any points you may wish to negotiate with the franchisor. Obviously, the franchisor will likely not reduce the initial franchise fee and/or the royalty fees; however, there may be some verbiage that you want to change in certain parts of the Franchise Agreement that could benefit you when you are ready to sell or transfer the franchise to another party. Certain things can be negotiated with most Franchisors.

3. Research the industry. Stay away from fads and make sure the product or service offered by the franchise is not part of an industry that's changing......what about healthcare changes, for example. What about retail video rental businesses?

4. Visit with as many franchisees as you can. On the phone and personally visit any that are near you (within driving distance). Ask questions about how long it took them to ramp up to cash flow positive position. How soon did they need to add additional employees? Are they happy? Would they do this again? Do they feel they are making the money they thought they would at this point? How did they research and what made them decide on this particular brand?

5. Find out how many new franchisees came on in the last 12 months with this brand. Also find out how many left the system and why. If they left within the last 12 months of the date the FDD was printed, their contact info will be in the FDD. You want to contact anyone who left the system and find out why they left. Often it will be because they didn't ramp up as fast as they anticipated and they ran out of money to keep going; other times it could be a problem between franchisor and franchisee......you need to know.

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Article Tags: business opportunities, franchise opportunities, franchise research, franchises



Related Forum Posts
how much for a franchise fee? - Dear Colleague There is no easy answer to this question. Things to consider: [list=] The sizeof the Franchise Clent base Expected Turnover Intellectual Property costs (recoup) Number of Franchises Number of employees Original Set up costs Franchise admin costs An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000. Hope that this gives you some idea Take care Ian[/list]
Re: Service Or Product? - I agree with starting a Service-based Business in the economy. Here is what I think is critical: 1. Researching that your Service business has a market. 2. Marketing the Service with as much leverage as possible. 3. Product-izing the Service (aka Package Expert Knowledge). This will only help elevate you as "the" expert in your niche and make you accessible to people in different price points.
franchisebrief.com good clean design - I actually really like the design - it's clean and not busy. The information is easy to find. You mentioned you didn't want to monetize from the site thru the use of adwords but what about JV'ing with all or most of the Franchises you are referring people to. Is that possible in the Franchise industry?
Re: Franchise Support. What is it to you? - To be honest I have never been a big believer in Franchises. Which of them did you have the best and worst experience with, when you called in as an "interested buyer"?
Clothing Franchises - I believe that there are quite a few franchises for larger brands such as Diesel, Lacoste and Bennetton etc... but I am not sure how these contracts work. In New Zealand, Canada & Switzerland Clothing Franchises are for smaller designer brands & Outdoor clothing -- such as Bivouac, the great Outdoors etc Ian


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