When you buy a franchise, you’re investing your funds in many diverse elements. The fact that you’ve chosen a franchise model rather than a solo business indicates you are expecting more from the experience than just getting the keys to your store and opening up.
Ask yourself these six questions about any potential franchise.
1. Is there good leadership?
A strong leader provides a vision for the business. But even more than that, a franchisor who can inspire a team and a network of franchisees, who can encourage them to perform above their expectations, and who will be on-side during the tough times is invaluable.
As a franchisee you’ll be investing in the business headed up by the franchisor and the management team. Will you trust them to make the right decisions and to stay engaged with the franchisees?
2. Is the business model effective?
The greatest concept in the world can fail commercially if there isn’t a good structure to market it and bring in sales.
It’s the same with a franchise – only more so. What works brilliantly in one or two locations may not translate successfully to multiple venues, and without the founder at the helm.
Franchise systems can be simple or complex but they need to be able to deliver a profit to franchisees. Of course the individual franchisee is responsible for their own performance but you need a viable model to start with.
3. How strong is the brand?
For many franchises, the ability to trade under a well-known brand is the single most important reason for buying a franchise.
Franchisors can have an inflated view of their own brand however and the measure of brand-recognition among existing and potential customers.
It pays to do your own research. Check the brand’s reputation online and among friends. Talk to other franchisees about how the franchisor protects the brand – and find out how you will need to comply to play your part in maintaining brand reputation.
4. What training and business support is on offer?
Up there with branding as key drivers for franchisee investment, training and support mark the differences between setting up shop as an independent business owner, and becoming a franchisee.
Every franchise offers training and support. Upfront there will be essential training in processes and operation – many franchisors now offer business training too. You will have to dig deeper to find out what this entails, and whether it meets your needs.
It’s safe to assume in the early days of your business you will need to call on the experience of others in your network – either fellow franchisees, your local area or business development manager, or one of the head office teams (perhaps IT).
Find out how receptive the franchisor is to ongoing demands for support, and training (what they find acceptable, what is not) and check with franchisees already in the system to see if their views match.
5. Does the franchisor invest in the business?
Whether it’s research on the market, new store design, overseas expansion or technical developments, it is crucial for a franchisor to be driving the business towards the next goal.
So what initiatives is the franchisor supporting right now? How does the franchisor fund these projects? What plans are there for further developments that will help boost franchisees’ business? How tech-savvy is the business model? When was the last upgrade of equipment, the last brand overhaul?
6. Is there a good culture?
A strong, collaborative culture attracts good quality franchisees, and benefits everyone in the network. A positive, committed team will want to protect the brand, grow the business, share best practice and target profitability for all franchisees.
Are the franchisees in the network committed to the business? Is there open and transparent communication between the franchisor team and franchisees? Is there a one-for-all, all-for-one culture?