Do you remember the last time you made a major purchase? Whether that purchase was a house or a car, you attempted to gather as much information as possible in order to make sure you were doing the right thing. Well, investing in a franchise business of your own is major. Here's how to research one.
I do about 20 franchise seminars/classes a year. I enjoy it, and I feel that my audiences benefit tremendously. Once in awhile, an audience member will come up to me after my presentation, and say this:
"Joel, I wish I would have heard you speak before I bought my franchise a couple of years ago. I don't think I did enough research."
Being the shy guy that I am, I forced myself to ask the next logical question:
"What do you mean by not doing enough research?"
"Well, I never thought to call or visit any franchisees of the franchise I ended up buying. I just read the legal documents, talked with the franchise salesperson, and made my decision to buy it,"
I told him that I wished that he would have heard me speak a couple of years ago, too. I was getting the feeling that he was in some sort of pickle, so I didn't press any further. (But I wanted to!)
Whatever pickle he was in, this pickle may have stayed a cucumber if he would have only done the easiest, most basic thing when it comes to researching a franchise that you are thinking about investing in. Would you like to know what that basic thing is?
I mentioned it in one of the paragraphs above. Can you find it?
It's contacting franchisees. Call the folks that have already invested their own money into the franchise concept you're thinking of investing in. If it's fairly easy to do, pay an in-person visit to one or two of these franchise owners. Hang out with them for a few hours. See if you can picture yourself doing what they do. Ask great questions. Here's a few:
- What is your professional background?
- Why did you decide to get into franchising?
- Why did you choose this particular franchise to purchase?
- Are you happy with the support you are getting?
- What's your competition like?
- What do you wish you would have known before you bought this franchise?
Doing franchise research the right way * is not difficult. What is difficult is taking the emotion out of your decision making process, and only focusing on the facts.
When you look at buying a new car for instance, sitting inside the one you are interested in for the first time is an emotional event. Your senses are in a heightened state. (The new car smell alone is sometimes enough to send some folks right over the edge.) You're not really in fact-gathering mode. You're in dream mode. Dream mode can be a dangerous place, because it's based on emotion. If this car turns out to be too rich for your budget, or the insurance costs are astronomical, your dream is over. Maybe you should have done some fact-gathering before you sat in that beautiful new car.
When you are looking at franchises, your emotions will run high, too. It can be really exciting (as it should be) to look into small business ownership. Just don't let the excitement of potentially owning a business that you can call your own get in the way of doing the research that's required.
If you base your decision to purchase a franchise on the facts, you have just lowered your risk. A lot.
Here's some tips from the SBA on research.
*Non-government website link
(The Franchise King, Joel Libava, is president of Franchise Selection Specialists Inc. Joel helps those interested in exploring franchise ownership all over the country find great opportunities that are a great match for them. He is frequently called on by the media for his no-spin insights on the world of franchising. You can follow Joel on his award winning blog-The Franchise King Blog.)
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