Advice for buying a franchise business
Let us presume you have narrowed down your choice and have selected the franchise that most appeals to you based upon your personal strengths and qualities. There is no substitute for hard work when investigating your franchise. If you were buying a house it would make sense to have a building inspection completed prior to handing over thousands of (dollars/pounds). So the answer here is to invest in professional advice. Do not treat this as a cost, but an investment. Surely it is far better to take advice and pay a few thousand for the privilege rather than hand over hundreds of thousands only to lose the lot when the business fails! Speak with your country’s Franchise Association as a starting point.
The real answer is to speak to existing Franchisees of the system and ask a set series of questions such as the following;-
1. Are you generally happy with your decision to enter this business?
2. Given your time over again would you make the same decision now you are better informed?
3. Are you making the money you expected?
4. Are you getting the training you need to make a success of your business?
5. Are you getting other general support from your Franchisor, and what do they do for you?
6. Were there any unexpected cots I should prepare for?
7. How much money will I need for working capital?
8. Are you happy with the advertising and marketing?
Most Franchises are happy to answer such a series of questions – after all, they were in the same position as you not so long ago. Remember they have a business to run so respect their time. Do not expect every franchise to be 100% happy all the time. That is not reality, but if you find most of them are reasonably contented then this may be the business for you.
If a Franchisor gives you a list of three or four Franchisees to call, do not speak with them only; speak to as many others as you can. Again, a couple of days spent on phone calls or visits is time very well invested.
If necessary fly across the country or even overseas and go and see these franchises face to face. The World is shrinking as air fares drop and again, such an investment in your decision making could prove invaluable. If not, do not be afraid to say no and keep looking elsewhere for the right business for you.
Phil Blain, Franchise Alliance