Franchise Industry - Insider Secrets! (Don't tell!)
How much do you really know about the Franchise industry? OK, many people say it’s not actually an industry, more a method of distribution of products & services, or a method of expansion of a brand. Whatever you call it…
What’s the best franchise? Did you know that there are over 3,500 different franchise brands active and available in the US? In every specialty from healthcare to fitness to food to hotels to pest control to cell phone repair to training to life coaching to insurance to car rental to franchise consulting, and so much more! There are B-to-C and B-to-B businesses, products or services, retail, food service, wholesale, online and probably many others that I am missing.
How in the world would anyone choose the best franchise for their particular situation and goals?
Many options are out there, including the use of franchise coaches or consultants, exploring options online, working with a business or franchise broker, attending regional or international franchise expos, and more. You will see and hear lots of varied opinions and advice on which option will work best, but I believe that all those opinions can be very useful. A good coach or consultant can help you analyze your goals, strengths and experience to narrow down to specific industries, specialties or styles of business. You can research online since most franchises are providing terrific virtual brochures, videos, testimonials, etc. I really love in-person franchise expos because you will see so many different concepts in one place and have a chance to speak with reps about their offerings, comparing them at the same event.
The “insider secrets” I promised you:
The correct question is: What is the best franchise for me?
Don’t let anyone “sell you”. The best franchises want to educate candidates while learning enough about them to determine whether they are a good match for the culture and mission of the brand.
Look for brands that are growing, not stagnating, and ask for their plan for the next year or two of growth. Do they have enough resources in onboarding and training to handle this expected growth?
How have they responded to the challenges of the last recession and the current pandemic? Did they act quickly and decisively to minimize negative impact and protect their franchisees?
Ask if they have a succession plan or exit strategy for their franchise owners. Can they help you sell your business when you are ready to retire, and at what cost to you? Do these resales command a good price in the marketplace?
Determine what your weaknesses are, or in what areas you will need the most training and assistance, and dig deep to see how the franchises you are considering will support your particular needs. Meet the people in these support departments and make sure you believe that they can and will help you start and build your successful business.
Speak with as many existing franchise owners as you can, and visit some if at all possible – They may tell you a different story when you are face-to-face. Don’t let the franchisor arrange these validation contacts, in case they only connect you with their ‘all-star team’…
Reach out to some former franchisees and ask them why they left and if they achieved the results they wanted. If they did not, why didn’t they? Was their exit handled professionally and with empathy, if necessary? Be aware that many people will assign blame anywhere but in the mirror, so consider checking with existing owners in those same regions for their viewpoint on these former owners.
Consult with a franchise attorney (not a general attorney) so you can get a professional opinion on the franchise agreement and any associated addendums, contracts or documents. DO NOT SKIMP ON THIS STEP; it is solely to protect you! Remember,you will be investing a tremendous amount of money and time in your new franchise business, so invest wisely!
If you want more franchise industry “insider secrets”, just ask me!
– Ron Bender