Tweet

Evaluating the franchisor

Written by: Suzanne Donald

Article Overview: We regularly get asked “is this is a good franchise?”, and though we cannot give feedback on specific franchises, we can help you ask the right questions. As you are entering a two-way relationship, it is vital that you have confidence in the franchisor you choose, and so you must ask questions about their business and structure of the organisation at the early stages.

Evaluating the franchisor

We regularly get asked “is this is a good franchise?”, and though we cannot give feedback on specific franchises, we can help you ask the right questions. As you are entering a two-way relationship, it is vital that you have confidence in the franchisor you choose, and so you must ask questions about their business and structure of the organisation at the early stages.

Firstly, are they a member of the bfa (British Franchise Association)? This is the organisation that acts in the interest of the UK franchise industry; accrediting franchise companies and helping to maintain and develop the standards of good franchise practice in the UK. Our website, whichfranchise.com, only promotes bfa members.

Other questions you should ask the franchisor are:

• Is the franchisor financially sound?
• What is the director's background?
• What did they do previously and why did they go into franchising?
• Does a comprehensive operations manual support the training?
• Has the franchisor run outlets in similar areas to yours?
• How successful is the franchisor and existing franchisees?
• How thorough is the training at the start-up stage and thereafter?
• How many franchises have they opened in the last 12 months?
• How many applicants do they reject?

One of the most important sources of information on a franchise company is the franchisees. You should visit existing franchisees to learn from their experiences and to find out their opinions on the services provided by the franchisor. Good franchisors will always allow you free access to any franchisees in their network and, in most cases, existing franchisees will be happy to talk things over with you.

Some of the questions you should ask are:

• Is your franchise profitable now?
• Is the franchisor aware of changes in the marketplace and quick to adapt?
• If there is illness, does the franchisor offer to help?
• What kind of on-going support do you get?
• Did you get good training, systems and manuals?
• Is the franchisor keeping their end of the bargain?
• How long did it take to recoup your investment?
• Does the franchisor welcome suggestions from franchisees?

Asking these questions should help you self-evaluate the franchises you are interested in, and come to a conclusion as to whether to pursue your interest further.

Related Articles
  What Do Franchisors Look For in Potential Franchisees?
  Qualities to Look for in a Franchisor
  The Ten Golden Rules
  Financial Analysis for Evaluating a Franchise opportunity
  Are You a Potential Franchisee

Article Tags: 12 months, british franchise association, confidence, experiences, franchise companies, franchise company, franchise industry, franchisees, franchises, franchisor, franchisors, free access, marketplace, relationship, sources of information



Related Forum Posts
Re: 50 States - All Franchisees of the U.S. Government - [quote="RussellWebb":1twrc65u]Is this common knowledge in the franchise arena?[/quote:1twrc65u] This is not common knowledge in the franchise industry. I don't even see it this way. I don't think it's a franchisee/franchisor relationship at all. By definition, a franchise is the agreement between 2 legally independent parties which gives: - a person the right to market a product/service using the trademark or tradename of another business (franchisor) - the franchisee the right to market a product/servuce using the operating methids of the franchisor - the franchisee the obligation to pay the franchisor fees for these rights - the franchisor the obligation to provide rights and support to franchisees. The first 2 points don't apply to the federal/state relationship. The last 2 do.
Re: What Franchisors Want From Franchisees - In my experience one of the things franchisors look for is the professionalism of a candidate. I have run across quite a few times where I had a candidate looking a certain franchise and the other person that was looking at the same territory made their decision first and my client was left without a territory. That being said, my client did make their decision, it was just a day too late, but we didn't know that at the time, so the franchisor went to the drawing board and without overloading the market figured out a way to create 2 territories by moving the 1 territory over and establishing another one. Both franchisees were happy and the franchisor got a 2fer. Talking with the franchisor afterward they told me one of the main reasons they did that was because of the responsiveness of my candidate. They say this was very professional and it wasn't just the $$ that made them create the additional territory, although I am sure that played a part, but they really worked with all of the existing franchise owners and the new one and my candidate to get this done.
Re: Franchising 'where to advertise?' - [quote="theFranchiseMarket":2v907mtu]I love Baseball, but "If you build it, he will come" doesn't neccessarily work at times with website concepts. Simply, find the advertising solution that is right for you. So many times I hear or read "find the franchise that is right for you" but the same can be said of franchisor advertising as well. There are many advertising avenues for franchisors, but just a few are true leaders in the industry.[/quote:2v907mtu] Hi theFranchiseMarket, For those of us who aren't as familiar with how franchises work, can you tell us how an individual franchisee is supposed to market itself? Are there any restrictions from the franchisor? And how much does a typical franchisee rely on the franchisor to create promotional campaigns (e.g. tv commercials, flyers, etc.) in its territory? More importantly, who are the "true leaders in the industry"? Thanks
Re: Introducing a US franshise to a Canadian market - When franchisors begin to expand outside of the United States, Canada is one of the first areas they consider because: 1. Similar culture 2. Same language in most of country 3. Some provinces require registration, but it is not considered too difficult. 4. An economy that generally mirrors that of the United States (may be different currently) The main cost for a franchisor would be contracting a Canadian franchise attorney to convert their legal documents to meet Canadian law, then reprinting their marketing material. If a person sees a franchise they like, that is not currently in Canada, they might approach the franchisor and ask about becoming an area developer for the franchisor. I don't think that most franchisors would not sell a master franchise in Canada, in which the franchisee takes over the entire country, because Canada is such an opportune areaa, but by becoming an area developer the new franchisee could have the right to develop/sell several franchises in a given area.
Re: Why Franchises Fail - [quote="Nana":307g5e63]Another reason franchises can fail is due to lack of effort on the franchisees part. If the franchisee does not give it their 110% and purely imitates rather than innovates they will increase their chance of failure.[/quote:307g5e63] I agree. Sometimes franchisees rely too much on the franchisor. They think the franchisor will run their business. Wrong! The franchisee is responsible for manging day to day operations of his franchise location.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Emotional Intelligence in Business

Are You My Mentor

Getting The Media Attention You Deserve

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.