Evaluating & Buying a Franchise

Interviewing Existing Franchisees

How Do I Find the Right Franchise?

While the process in and of itself can be a heavy investment of time and energy, it is an indispensable step that needs to be taken along the path towards wise investment.

One of the most fundamental stages of independent research that any savvy investor should take part in is the polling and interviewing of a company's franchisees that are currently operating their own stores. While the process in and of itself can be a heavy investment of time and energy, it is an indispensable step that needs to be taken along the path towards wise investment.

Starting a new business is exciting, and for the prospective franchisee it is no less so. Given this, however, it is especially important not to let ones shrewd business judgment be replaced by hopeful naivety. Indeed, one of the mistakes made more commonly among prospective franchisees is to ignore the unpleasant franchisee reviews while listening only to praises.

Even if the majority of the franchisees can find nothing but happy, positive things to say about the company, the wise entrepreneur will look beyond these cheerful business owners and seek out those who had worse experiences with the franchisor company. Why? Through finding out about a company's responsiveness to its franchisees in a wide variety of locations and areas, a prospective franchisee can develop a much clearer idea of how the business functions as a whole.

Yet it is rare that one will find someone completely satisfied with their franchisor - even the most positively impacted franchisee would be hard pressed not to find areas of improvement that the franchisor could perform better at. For the prospective investor, finding out all of the complex details is essential in order to determine whether or not the franchisor is worth putting ones money into. Often an investor will find that a certain level or amount of "needs improvement" area can be sustained if the benefits to joining a particular organization outweigh the flaws.

So, in order to know exactly what to look for, there is a series fundamental topics that should be brought up with existing franchisees of the investors company of interest.

One of the primary issues of concern should be the level of training provided by the franchisor to its franchisees. While nearly every franchisor will offer some sort of training program, there is a great need for the investor to find out what training entails. The company itself will explain whether it involves a simple day long session or an intensive two week course. Finding out its quality, however, is a question to put to the existing franchisees. Certain independent researchers have reported hearing that the franchisees they interviewed came out of training more confused than when they went into it. Others hear reports of franchisees being unprepared for major operational concerns at times. Should these complaints be heard often, the potential franchisee should beware.

Another feature to look out for is the level of continual support offered - and delivered upon - by the company. The franchisees pay regular royalty fees for the length of their existence. In return, the company should deliver upon it promise to reward this fee with adequate support to help each individual franchisee adapt to changes in the market place and stay afloat in other areas as well. While many companies do provide a great network of support for their franchisees, it is never safe to assume this about the particular company one is interested in franchising from. Listen to the franchisees and find out how they feel about the level of ongoing support provided by the company.

Probably the most attractive part of being affiliated with a larger franchisor should be the potential for amazing buying power that can be wielded by companies of such magnitude. Unfortunately, however, shortcomings in management can at times cause companies to not fully take advantage of this bargaining leverage. With the many expenses that franchisees face, especially at nearer to the opening of their businesses, getting good rates is essential to keeping ones business edge. Ask the current franchisees if they feel they are getting the best prices possible, and determine whether the company is worth investing in.

Another major boon to the franchise system is marketing, advertising and brand recognition. By doing business under a name recognized throughout ones state, nation - even around the world - one can experience the instant success that it could take an independent business opportunity years to develop. Of course, companies do receive advertising fees from their franchisees. Therefore, make sure that the people interviewed are getting their money's worth.