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Franchising 101 - Finding Great Information

Written by: Rick Bisio

Article Overview: This article will provide the reader with a large number of resource alternatives to help in the better understanding of franchising.

Franchising 101 - Finding Great Information

Frankie was eating a sandwich at a fast food franchise. He liked the sandwich. The place was packed. “This place must be a gold mine,” he thought. He called the franchisor, carefully study the franchise information the franchisor provided, talked to a number of franchisees, went to discovery day, rounded up his down payment, and opened his doors.

Now Frankie understands he made a really expensive mistake. He still likes the sandwiches, but he is struggling with the employees, the hours, and the general public. Turns out, the franchise isn’t a right fit for him. But his life savings are tied up in it, and he has to make the business successful before anyone will buy it.

Frankie believed he did his homework. He did spend a lot of time, and he read the franchise materials provided - what went wrong?

He didn’t begin his franchise education at the beginning - Frankie skipped right to Step Four.

Don’t end up like Frankie. Accomplish the following franchise investigation steps to decide what you really want and need, then to ensure you’ll be able to identify it when you see it.

Step One: Take a long, honest look at yourself. If you don’t already have a life vision that excites you, create one. Then assess your skills, and look at what types of businesses you would be good at. (Hint - assess your skills, not your likes.) Make sure your income and lifestyle goals are quantifiable.

Step Two: Understand business ownership. Study the mentality of franchise owners and understand why people own their own businesses. (Hint - it’s not just about getting away from “the man.”)

Step Three: find out more about franchising as a whole. A little research here will widen your view of how franchising works, of what you really purchase when you buy a franchise, and of what’s available (Hint - franchising is about so much more than fast food and mufflers!)

There are a lot of franchise resources accessible, from consultants to books and magazines, and it goes without saying that there are countless web sites as well. Of course, if you want one-stop shopping, I can’t help but recommend The Educated Franchisee, The How-To Book for Choosing a Winning Franchise. In all sincerity, I wrote the book because, as a Franchise Consultant, I have often been disturbed by the sad stories of people who got into franchising for the wrong reasons, or got into the wrong franchise - it’s tragic, really, when you realize that a little bit better preparation can make the difference between success and failure.

If you’re not ready to invest to a book and want to dip your toe in the water first, here are some web sites that can help. You may be on educatedfranchisee.com already, reading this article. If not, that’s a sound place to begin. There is a lot of franchise information on the site, ranging from a Recommended Reading List to FRANdata’s “Profile of Franchising,” and numerous other franchise resources.

Two other valuable sites are The International Franchise Association site: franchise.org and Entrepreneur Magazine’s Franchise Zone. Entrepreneur also publishes “The Entrepreneur Franchise 500” every January.

These resources will offer information on investment level requirements for different types of franchises, and will probably open your eyes as to what types of franchises are available.

The last step is to look into individual franchise companies. The simplest way to do this is to work with a franchise consultant (full disclosure - I am a franchise consultant as well as an author), or to work with each individual franchise directly. Here are the tools franchisors typically make available to franchise candidates:

The initial package: Franchisors provide brochures, DVDs and web sites designed to give you an overview of their specific franchise opportunity.

The FDD (Franchise Disclosure Document): This is the standard disclosure document that all franchisors provide. It includes information on the company’s history, the backgrounds of key executives, costs and fees, obligations of the parties, litigation experience, success rate information, audited financial statements, and a list of existing franchisees for you to contact. Many franchisors also include information on franchisees’ earnings although they are not required to do so.

Speak with existing franchisees: choose a number of franchisees from the list in the FDD. Call them to obtain a wealth of information. Do they like the business? Would they buy it again? What do they do every day? How was the initial training? How is the on-going support? Are they reaching their financial goals? How long have they been in business? What is their relationship with the franchisor? And so on. Prepare your questions carefully. If you are looking for a good list of questions to ask, go to the download section of educatedfranchisee.com. You will find hundreds of questions to ask.

Meet the franchisor: Attend a Discovery Day at the franchisor’s headquarters. Meet the staff, and be sure you believe they are competent and that you’ll be comfortable asking for and accepting advice and guidance from them.

When you have collected all the franchise information you need, you can decide if the franchise is a good fit and if it gives you a high probability of achieving your goals. Then make an educated yes or no decision, and move forward. (Hint: “hopes and dreams alone are not a good reason to buy a franchise! Gathering solid information is the way to exponentially increase your chances for meeting and exceeding your franchising goals!)

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  I Want to Take My Business to the Next Level
  The Top 7 reasons why Franchising is Better than a Brand New Business
  How to spot a solid franchise opportunity
  FRANCHISING PERSPECTIVE

Article Tags: business ownership, discovery day, fast food, food franchise, franchise education, franchise information, franchise owners, franchise resources, franchisees, franchising works, franchisor, gold mine, homework, life vision, lifestyle goals, man step, mentality, sandwich, sandwiches, types of businesses



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Re: Get Improved Sales Optimization - Great Information Jason! As per the online business perspective, every user looking for relevant information and user friendly website structure. You can also provide 24hr customer support to make your customer reliable and easy.
Re: Re Franchise etc - [quote="bmueller47":e0j0nu4t]Can you see a shift of various types of franchises? What I am thinking about is that today it is more difficult to create franchises, that has great appeal. More and more people want to have their business, but no interference of someone else.[/quote:e0j0nu4t] Not sure what you mean exactly but it is certain that more and more people want to have their own business but not more and more people know what they really want to do, or how to do it. And that's what franchising is all about. Franchising is not for an entrepreneur. An entrepreneur will do his own thing. People who buy franchises want a turn key business, with a proven model. Franchising in the US had never been that good. I don't have the exact numbers in mind but I know for sure that franchising is growing more and more as people are getting more and more aware of this business model.
Franchising vs. Licensing? - What is your opinion on Franchising vs. Licensing? Which is better?
Nominations for a new Franchising Moderator! - Is there anyone you'd like to nominate as our Franchising Moderator (or volunteers for the position)?
Great Article, chock full of info. - Ian, Thank you for linking your article regarding Licensing vs Franchising. Its a good read.


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