Today’s would-be franchisees can quickly find themselves overwhelmed by the sheer number of franchise opportunities being offered today. However, I’m not suggesting that it’s bad to have lots of choices – especially when it’s crucial to make the right one because of the seriousness nature of the decision. Like buying a franchise.
So how to go about narrowing the choices becomes the question. Every would-be franchise owner wants, expects really, several things from their future franchisor. Here are 5 things a would-be franchisee, presumably like yourself, should expect from a potential franchisor.
1. A Professional Image
No one want to invest in a franchise that doesn’t come across as being professional. Today’s franchisors have numerous touch points where they can display their professionalism, including their:
Franchise sales department
“Never forget that you only have one opportunity to make a first impression – with investors, with customers, with PR, and with marketing.”
– Natalie Massenet, former journalist and current fashion entrepreneur
But even with all those opportunities, franchisors really only have one chance to make a professional impression on both consumers and prospective franchisees.
2. True Upfront Cost Estimations
People interested in franchise ownership need to have the full picture of what it’s going to take to start a franchise business, especially when it comes to the money part.
When a would-be franchise owner visits the website of one of the franchise opportunities they’re interested in, one of the first things they’re going to look for is cost. Not only should the upfront (or beginning) investment information be easily accessible, it needs to be accurate.
For example, if the upfront investment amount stated ranges from $175,500-$225,000, no would-be franchisee should expect to invest more than $225,000 to start their business.
Tip for Would-Be Franchisees: A few calls to existing franchisees asking them what the amount was that they ended up investing upfront can serve as a validation of the upfront investment needed to start the business.
3. Territory Protection
Personally, I’m a strong advocate for territory protection. I think it’s a crucial thing to have in most cases.
Can you imagine opening the franchise business of your dreams only to find out 6 months in that another franchisee will be opening her franchise less than one mile away? (I think my blood pressure started rising as I was writing that sentence.
I remember getting a call from a guy I had helped put in a franchise. He angrily told me that the franchisee located in the territory right next to his was aggressively marketing into his territory, and as a result he was losing business. It’s one thing to lose business to a competitor, it’s just part of business, but losing business to another franchisee? Of the same franchise? Really?
(Note: I ended up placing a call to the franchisor to complain about the issue that the franchisee I helped get into business was experiencing. I found out that the franchisees have territories, just not “protected” ones.)
Tip for Would-Be Franchisees: Read your franchise agreement carefully. Better yet, hire a franchise attorney.
FYI: I’ve been involved in franchising one way or another for 20+ years. The story I shared above was the only time I ran into a situation like that.
“Support” is a really broad term. But, it’s one that’s used all the time when the franchise business model is referenced. Franchisees expect it. And, they expect it to be good.
Support from franchise headquarters should include:
Fixes for technology-related issues
Fixing customer complaints when warranted
And, much more.
5. Site Selection Assistance
The franchisor may or may not have a dedicated real estate person or department. If they do, great. If not, make sure they at least have access to commercial real estate professionals in your local area.Part of what you’re paying for upfront is a franchisor’s proven expertise. Part of their expertise should include real estate. The team at franchise headquarters should know what works and what doesn’t when it comes to a successful franchise location.
Tip for Would-Be Franchisees: When you call existing franchisees during the research process, ask them how they feel about their franchise location, and if the franchisor provided assistance in finding it. In addition, ask them how long it took to find their location.
If you’re thinking about buying a franchise in the near future, it’s normal to have high expectations from the franchisor. The current crop of franchisees should be able to help you figure out if those expectations will be met if you end up becoming a franchisee.