So, you found a franchise you want to buy. But has the franchisor offered it to you? Typically, that doesn’t happen until the end of the investigation process and after an approval meeting involving everyone you spoke to and the executives at the franchisor.
I have seen franchisors close files at every step in the investigation process, have even seen candidates asked to leave DDay (usually last step in the process, a face-to-face meeting) before it ended.
Franchise brands benefit greatly from making sure the candidates they are considering are a great fit for their type of business and their franchise model. They want happy and successful owners who use the resources available to them and build the brand footprint as they open their locations.
Just like you want to evaluate franchise opportunities and find your perfect fit, franchisors are doing the same. It is a mutual evaluation process, not a sales process.
If you inquire with a franchise brand and they use a hard sell sales process with little time spent getting to know you, I would suggest caution.
What is the franchisor looking for?
First, they want to see that you have the skills required to succeed in their business model. Is your background focused on management, sales, marketing, or other skills? Unlike most of corporate America, franchising considers skills to be largely transferrable. They will want to make sure that the way you manage or the way you sell fits how their owners use those skills to grow the business.
If you are working with a professional franchise consultant, we will spend time with you before you talk to a franchisor to outline your skills and how you use them so that you talk to franchisors that are more likely to fit right out of the gate.
If you are going solo, you will have to prescreen as best you can then the franchisors you inquire about. Unfortunately, they don’t talk about the franchisee model in marketing so it will take a little digging.
During the investigation you should find that the development team will ask about your background and the skills you bring. They will ask targeted questions on skills that they need to see franchisees excel at. If they have any concerns, they will make them known.
By the same token, if you have trouble seeing yourself in the role of the franchisee with a brand you should make those concerns known so the franchisor can clarify any misperceptions.
The franchisor will also want to make sure that your finances and goals are in alignment. They should want to see that you can comfortably fund and grow the franchise, and that the business will provide the kind of opportunity that you can be enthusiastic to build. If they feel you will be under financial pressure, they may close the file until that can be resolved so that you won’t be strained.
Now, two categories that are harder to measure. Relationships and following a process.
As you go through your investigation the people you work with at the franchisor and the franchisees that you validate with will be taking note of how you and they get along. They want to gauge how you will work with the team and franchisee organization once onboard. How you interact will tell the franchisor if you would be a positive brand builder.
In addition, they will be noting how you follow a system. The primary way they have to do that is to see how you follow the investigation process. They will have a multi-step process that they have found is an effective way for you to learn their business and for them to get to know you. If you follow that investigation process, make your scheduled calls (or reschedule in advance), complete any homework they give you and review the FDD to be prepared to discuss it, then you are off to a good start. If you don’t follow the process, it may raise red flags that you may not follow their system once you are a franchisee.
One other red flag along these lines is when a candidate comes in and tries to demonstrate their expertise by saying what they would change in the franchisors systems during the investigation of soon after becoming a franchisee. Yes, franchisors value franchisee ideas and input. Learn the existing system first, then tell them how you would change it. You might find there is a method to their madness.
At no point is there any benefit to you whatsoever in misleading the franchisor on your skills, financials, or anything else.
Buying a franchise is not like buying a car, the franchisor lives with their candidate choices for a long time. Nobody wants years of strained relationships, franchisees, or franchisors! Both sides want to make the very best possible decision.
What is your success story? Let’s go find it!
George Knauf is a highly sought after, trusted advisor to many companies; Public, Independent and Franchised, of all sizes and in many markets. His 20 plus years of experience in both start-up and mature business operations makes him uniquely qualified to advise individuals that have dreamed of going into business for themselves in order to gain more control, independence, time flexibility and to be able to earn in proportion to their real contribution.
Contact the Franchising USA Expert George’s Hotline 703-424-2980.