Begin your research by conducting a thorough and honest internal audit of yourself. Look at how you like to operate. Analyze your strengths and weaknesses. Review the things that make you tick, and the things that tick you off. Do you like to be in charge and calling the shots, or do you like to delegate? Do you like to be behind a counter or desk all day, or do you prefer being out in the field working one on one with customers and potential customers? This is just the tip of the iceberg for the kinds of questions you should be asking yourself. Give this some serious thought. The worst thing you can do is prematurely choose a franchise concept you will be unhappy working in day after day.
Now, armed with a general idea of what you think you'd like to do, regularly read every franchise-related publication (and website) you can get your hands on. Talk to friends and acquaintances who have been in franchising. And don't be afraid to ask the franchise owner down the street for their take on what it's like to be a franchisee. You'll want to process and evaluate all of this information with trusted friends and advisors.
BrokersAt this stage in the game, many prospects turn to franchise brokers or consultants. These professionals do come with strings attached and are not the answer for every prospect. Brokers essentially work much like real estate agents. They can help you find the ideal franchise for your budget. Brokers can help you determine what brands and concepts would be a good fit for you based on your strengths, weaknesses, and interests.
For example, if you have strong sales skills and a demonstrated history of being able to manage yourself, you may not need a higher-priced retail franchise to succeed. You might just be able to leverage your sales and self-management skills and purchase a home-based or mobile franchise. Brokers and consultants are especially valuable to anyone new to franchising.
Of course, these professionals don't represent or have knowledge of every brand and concept out there, but the good ones will be knowledgeable about the industry in general and about specific brands or industries. They can be a good place for you to turn. Be aware that franchise brokers generally represent a finite list of brands that they are compensated for representing. Nevertheless, brokers can be another tool in your franchise selection arsenal.
Choosing The Right Opportunity For YouOnce you've examined yourself and considered the broker question, it's time to take the next step. Now you want to look at the various industries and sectors that are attractive and - hopefully - a good match for your skill set.
Making a List
make a short list of the kinds of industries you're interested in - food service, senior care, home repair, etc. Review the players, the competition, and any regional strengths and weaknesses for the industries you're considering. Older, more established brands may look safe and solid but could be less flexible to deal with. Likewise, newer brands may be big on innovation, but could be short of cash, or worse, struggling financially. Evaluate your risks carefully.
Now begin to zero in on a single franchise sector. Start visiting the various franchisors' websites. Most will have plenty of franchising information available online. Send an email request for more information or pick up the phone and call the main office. Note who gives you the best information and how quickly, as this could be an indication on how things will be down the line if you join their franchise system. Be on the lookout for the differing "philosophies" of the franchises. Follow your instincts as to how these styles and approaches align with your personal style and beliefs.
Take a good hard look at franchise fees, investment requirements, and ongoing royalty fee structures. This is key to your evaluation process and can save you and the franchisor a lot of time. Look for ranges you are comfortable with, both up front and ongoing. Get clear on what is offered to franchisees in terms of operations, training, marketing, and technical support. Don't be afraid to ask any question.
Soon you will begin to interact with franchise executives, who will most likely engage you through a series of emails that contain all kinds of information and testimonials. And you will most certainly begin a series of phone conversations. This is how both parties size each other up to determine if there is a proper fit.
The interaction will become more regular and, if promising, will ultimately lead to face-to-face meeting with the franchisor. You also will receive a franchise disclosure document (FDD). The FDD is a legal document that must be provided by the franchisor to the prospective franchisee at least 14 calendar days before any agreement of sale is signed and finalized. Its purpose is to provide prospective franchisees with enough information to help them make an informed decision about buying the franchise. The document is packed with information. You should have a franchise attorney review the FDD with you.
Although there are many more steps involved in the process of becoming a franchisee, at this stage in the game you're well on the way to making the franchise decision.