Some Advice On Starting A Franchise

One of the most important sources of valuable information will be the existing Franchisees. The Franchisor's system should include available exposure to all of the Franchisees. First of all, in most jurisdictions where Disclosure Documents are required, one of the required disclosures is a full list of all Franchisees, including contact information.

If you get a feel that a Franchisor is discouraging you from communicating with certain Franchisees -- well, there's that alarm bell again.

That's not to say that all Franchisees will be happy, or that all will be great operators. In fact, most systems have disgruntled or unsuccessful Franchisees. It will be important for you to speak to the top echelon, the middle range people, and the poor performers. The test should be to identify the factors that differentiate the groups. Then determine how you are more like the successful people, and how you are not like the unsuccessful people.

The most important point is that the Franchisor has a system to allow efficient access to all Franchisees. Some Franchisors will provide email questions to send to all Franchisees plus ask you to call your own sample from the complete list. Others will provide for conference calls with several Franchisees. Others will provide for Discovery Days including existing Franchisees. Of course, conference calls and Discovery Days will include 'favorable' Franchisees. That doesn't mean those processes aren't very helpful -- you just have to realize who you're dealing with.

Other Franchisors will ask you to talk to people in your geographic area. Or people with a similar background. All of these things make sense, but you must ensure that you also have the ability to communicate with any existing Franchisee, and not just the suggested sample. You will be able to judge the Franchisor's openness through their reactions in this process.

Responsiveness
This one is fairly simple but very important. If the Franchisor responds to your inquiries quickly and efficiently, it's probably a good indicator of the type of responsiveness the company executes as a whole. Of course, that becomes very important when you require support once you become a Franchisee.

If a Franchisor takes several days to get back to you after your initial inquiry, you should take that as a warning sign. If they don't respond in an efficient and professional manner to your email and telephone inquiries as you go through the process, it probably means they are not running a tight ship.

A system that responds almost immediately, and then starts you on a step-by-step information flow, including personal contact, should be what you are looking for in terms of responsiveness.

Face-To-Face Meeting
The system of evaluation for both parties should include a face-to-face meeting. After all, you are trying to determine if you want to get into business together for 5, 10, 15 or more years. If a Franchisor wants you to join the system without a face-to-face meeting, it doesn't really make sense. Would you start a partnership business without meeting your partner? A Franchise is not an actual partnership, but the same criteria should apply. It should actually apply to the Franchisor every bit as much as to you. So if that meeting is not part of the process, the system is incomplete.

There are several ways for the face-to-face meeting to take place. Many Franchisors have development personnel that will meet you in your community or a convenient location for both parties. Some Franchisors require a head office visit. Others will host Discovery Days, either at their head office or on a regional basis. All of these methods are fine, as long as you have some time for some one-on-one interaction.

I once asked a mentor of mine when our company was first beginning to offer Franchises, about the best method to determine that 'right' match. He said to me that the ultimate test is whether you would be willing to have the person over for a barbeque in your backyard. Of course, there are many other factors, but his point was that it should be someone that you would like to be in business with, and would enjoy their company.

The face-to-face meeting should also include an invitation for your spouse to participate. In fact, some systems require the spouse to be in attendance. Again, it is sensible to include spouses at the discovery stage because the ultimate decision to start a new Franchise business will be focused on building family dreams, and providing family security for the future. If a spouse is not fully aware and comfortable at the decision-making stage, it could create difficulties down the road as you build the business.

The main point is that if a face-to-face meeting is not a part of the process, and your spouse is not welcome to attend, the process is faulty.