Are you all done with your self-analysis and ready for next steps? We’ve got you covered. After you have gotten finished with reflection and analysis of yourself, it is time to move on to analyzing the opportunities you have out there in the open market. The franchise network you gain access to as an owner is one of the main benefits of franchising.
You should conduct a careful investigation of the franchises in the market you are looking into. This helps you determine what it really takes to succeed in that specific system (i.e. food, fitness, etc.) The best sources of information you can ever come across are the people in the shoes you are looking to fill.
You are going to be spending a bunch of time making this franchise happen over the next few months and years as it develops. You owe it to yourself to make an informed decision!
Getting in touch with franchisees in your niche
When you receive the FDD (Franchise Disclosure Document) from you’re a franchisor who you are interested in, it contains a list of all of the existing franchisees in the market. These are the people who can let you know how they are doing, how they feel they could improve, and how they like working under the franchisor in question.
Contacting these fellow franchisees is a good way to get yourself a real life of what makes the business tick as well as what ticks them off about it.
Try to get yourself a healthy mix of franchises rather than just one localized group. There are differences depending on many factors that can change the experience a franchise has.
Get in touch with franchisees that are new and old (age as well as business-wise). Try to sample successful franchisees in the network and ones who might be struggling to make ends meet. Contact men as well as women from varied locations around your region or country. Make sure your sample set is large and your information is robust. All of this will help you to make an educated decision.
What kind of information should you ask about?
When you call up these franchisees, you are going to want to determine a few different things. The information you want can be grouped into three main categories:
The Franchisor
Determining the kind of people and executives you will be dealing with at your selected franchise is important. Hearing this information from someone other than those people is especially important. There are tons of nuances and differences between franchisors.
Here is a quick list of questions you can ask about franchisors to determine quality and compatibility:
- What are their values? What is most important to them?
- Once you are a franchise, what actions do they take? How is their follow up?
- Are they helpful when you have issues? How is their response time?
- What do they do to support franchisees? What kind of ongoing education do they offer?
- Do the franchisees like working under the franchisor? Why or why not?
- Knowing what they know now, would they make the same decision to go into business with this franchisor?
- How is their online system? Do they provide you with web assets like a website or social channels? How is their support with those platforms?
The Operations
Get yourself a clear picture of that day to day life will be like running one of these businesses. Day to day operations is what you and your staff will be filling your days (and sometimes nights) with. Knowing what to expect and if you will enjoy the work is important.
Here are some quick questions you can ask franchisees about operations:
- What kind of hours can you expect to put in as an owner? What about staff members?
- Do staff members or managers feel overwhelmed?
- What kind of things do they spend most of their time each day?
- What do they like the best and what can’t they stand about the given business?
- Success in this business is determined primarily by what factor?
- Knowing all that they know now, what would they do differently if starting over again fresh with a new location in a new area?
- If they could do it all over again, would they choose this business for themselves?
The Finances
The last piece of the puzzle is, of course, the money! You need to go into business with realistic expectations about the investment this business requires. You should also know what you can see as a return in the first month, first year, first 5 years, etc. There are always exceptions and outliers, but it is good for you to have the averages in mind, also
Here are some quick questions you can ask a franchise about the finances involved:
- What Is realistic in terms of income and what do the timeframes look like for achieving it?
- What are the most profitable channels in a multi-channel business? (retail income, service income, both, etc.)
- How long did it take for you to reach a break-even situation?
- How much income is a realistic goal for the first, second, and third years in this business?
- What is the most important thing an owner can do to influence their income in a positive way? What about a negative way?
Need more information?
Have you done all of this and still feel like there is no light at the end of the tunnel? Maybe you should investigate some of the other options for franchise ownership types. Maybe you need a few more questions tailored just to your specific niche and fellow franchisees.
If you need more questions to ask or want us to help you through this process, get in touch with us. We have franchise connections from East Coast to West, knowledge in all our offered fields of franchise opportunities, and the willingness to help!
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