Buying a Franchise?
3 Questions You’re
ALLOWED to ask, and should.
Buying a franchise can be a great way to fulfill your dream of owning your own business. Most times, the franchisor provides a template to follow – based on theirs’ and other franchisees’ experience – and a vast array of training, tips, manuals and an owner’s forum to help you get setup, running and off to some decent profitability. it is not easy to “do your own thing” with the business you tend to have to follow how the franchiser sets it out. But the upside is the experience and camaraderie of a joint journey.
That being said, there are questions you have every right to ask. You may think they sound obvious, but it is remarkable how often buyers get swept in the momentum and romance of buying a franchise, such that they forget to seek deeper answers.
“Don’t be afraid to ask more than one member of the franchisor staff the same question.”
A HALF TRUTH IS A WHOLE LIE.
A Yiddesh Proverb
- The Franchise Disclosure Document. This is known as the FDD, and it tells you how many units have been bought and sold over the last year. If you notice a lot of sales, that would be a warning signal; a lot of sudden buys might be a good signal. Either way it warrants more investigation.
2. What’s the buzz? When you are speaking in front of a large audience, they tell you to keep an eye on the “back chat” during the speaker ahead of you. The compliments, the grumblings, the # comments on social media sites. That way you know the temperature of your audience and can adjust your speed, mood, content accordingly. While there are likely many sites that aggregate franchisee complaints, here are 2 useful ones – Unhappy Franshisee and Blue Mau Mau
3. Talk to a Failed Franchisee. Your franchisor should be willing to give you an idea of the closures they have had recently. Naturally, they will spin the closure as a wise-acre or lazy franchisee who didn’t follow the system, but you need to ask it anyway. You want to talk to one or two of those people. “Why did the franchise fail, if they had it to do all over again, would they? What is it really like to work in that business?” – these are all legitimate and necessary questions. Otherwise, you don’t know what you don’t know.
BONUS QUESTIONS
ADDITIONAL SUPPORT
Discovery Days may well be “awesome” and “really informative”, but what happens once you’re up and running? Is there a Support line, or access to the Franchisor Owner’s team or forum for advice?
BUSINESS EXPERIENCE
If most of the franchisees have a depth of business experience, the franchisor may have become accustomed to sharing only the most sophisticated ideas, over your head. That’s the obvious point here. But what if the franchisor, herself, is new? Then every question you raise could be a new one. It’s much harder to get a franchise off the ground when the template is untested.
CONFLICT RESOLUTION
What happens should you disagree with a policy, or want to do things your own way? It’s called “unit level innovation” and you need to know if it’s accommodated or even entertained. If you are a highly individual, creative person, this particular franchise might be too strict for you. Ask. Ask. Ask.
