As a franchise consultant, I deal with future franchise owners. These folks bring with them some pre-conceived notions about franchise ownership, and are understandably nervous about investing their own money into a business. I teach them what the reality of franchise ownership will feel like. The correct research steps can alter their reality. And make it more positive.
The most important, but often overlooked step in the franchise purchase process is this:
Research.
Why do most potential franchise owners miss so many important steps???
Potential franchise owners come to the table with their own ideas of how to research a franchise. These ideas may have come from how they previously have researched other large ticket items such as cars, electronics, and other major purchases. But, investing in one's own business brings with it risks that other major purchasing decisions don't. Like:
- The potential to lose a large sum of money
- The potential to end up with a fad
- Human Resource issues
- Community visibility
And much much more. After you feel that you have selected the right franchise opportunity, it is crucial to really dig in, and learn about the company, it's executives, and it's franchisees.
If you have never invested in your own business, how can you possibly know which steps to take during your due diligence? Advisors and friends may be a good source for some of those techniques, but unless the folks that are giving you suggestions have actually purchased a franchise business, I will argue for hours about their ability to really know what the essential research steps are. For instance, do they know how to deal with the franchise sales executives? That probably has not even crossed your mind. But, as you will see from the exerpt from my ebook below, it is really an important, but overlooked step...
"After your initial call with the franchise director, you will be excited about the prospect of learning more about the opportunity. There will be a second call scheduled, and the franchise director will get into more data with you at that time. Before the second call, however, there will be some paperwork to fill out. You will fill out a formal application, which will ask for more specific information about your backgrounds, and financials. You will sign it, and send it in, via mail, e-mail, or fax. What you signed will give the franchisor permission to do background and credit checks on you. They, of course, want to make sure you are totally qualified to become a franchisee with their franchise concept, if they decide to offer you a franchise. The decision to become a franchisee with a particular concept is of course yours at the beginning of the process, the franchisor in the middle of the process, and back to you again at the end. A good franchise company does not offer a franchise to everybody that is interested in it."
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