Here's How to Find the Good Franchises
This course is brought to you by The Franchising Company on behalf of the Franchise Brokers Association and the Franchise Training Institute.
At The Franchising Company, we’ve been helping people like you find the perfect franchise for over a decade. we’ve helped facilitate more franchise awards (that’s what it’s called when you successfully purchase a franchise) than we can count!
The following e-course will share the knowledge we’ve gained in our experience and is sure to get you started on the right foot!
Welcome to Franchise 101:
What you need to know BEFORE you purchase a franchise.
Part 1: Setting Proper Expectations
Figuring out who the best franchises are is not easy. Keep these questions on hand and ask them about any franchise you explore.
How much will it cost?
How much money can I make?
How quickly can I make it?
What are other people saying about it?
How will I be supported?
Can I see myself doing this every day?
Most people end up buying on emotion, or they’re swayed by fancy sales materials. In our opinion, and experience, this is not a safe or successful way to invest your life’s savings.
Especially when there IS a way to find the perfect franchise for your situation, which increases your odds of success and ROI! To reliably predict the viability of a franchise you NEED the help of a trained professional who has access to the information you need and can use knowledge and experience to help guide you to the best decisions.
A professional is someone who has access to and can analyze what is known as the Federal Disclosure Document (FDD). This is where you get the information you actually need.
Not all franchises are good investments, no matter how great they seem, or how perfect they appear. When you work with a professional, you will be armed with real data that can prove if a franchise has a history of success. Which brings us to Part 2.
Part 2: Know the Players
What you need to be aware of when beginning your search for a franchise investment.
When the average person begins their search for a franchise they usually begin looking online or may even visit a tradeshow. The internet is full of franchise noise. Thousands of brands are all competing to be heard and are doing anything they can to have you notice their concept.
As someone who is looking to invest in a franchise it’s important for you to understand how any inquiries you may make will affect you. Sharing your information online has consequences.
Make sure you make decisions on actual data with predictable results, not fancy sales materials.
Consider the motivation of the people you are talking to.
We think transparency is key and the only path to a successful franchise. It safe to say that all the people you’ll be speaking with in your process are motivated to either find or sell you a franchise so they will be paid. They are likely paid more to recommend certain franchises – and if you’re speaking directly to a franchise, it’s obvious their #1 goal is to sell you THEIR franchise.
There are basically 3 types of "people" you’ll encounter or talk to on your franchise journey.
A Franchise Broker, Franchise Consultant, or Franchise Coach (That’s us – or others like us)
Or you may talk directly to a Franchise Sales Representative who works directly for ONE franchise.
The 3rd type you're most likely to encounter are online franchise portals. These are websites with lists of franchises. While they seem to be providing you with helpful information - beware. Once you submit your information you'll be flooded with calls and emails.
The Truth about Online Franchise Portals
Lead portal sites are typically the first things that appear in your Google search about a franchise. They house a large inventory of brands that allow you to easily browse and learn about new franchise concepts. However, beware because their whole business model is to sell inquiries back to the franchises. The second you submit your information to these sites, it’s distributed to dozens of parties – franchises, brokers, consultants, and more!
This model is quite successful for them, and they make it very easy to select multiple brands to inquire about. This allows them to sell your information many times. The more franchises on the portal, the more calls and emails you’ll get.
At The Franchising Company, we respect you and your information – we never share, trade, or sell your information. Whatever you tell us stays between us and no one else. This is the sole reason we dedicated our resources to create our extensive franchise database – so you have a safe place to explore franchises and will NOT have your information shared with the wolves! We promise you will only get a call if you ask for one.
The most important thing to know, there is professional help out there, and you will pay the exact same amount for your franchise whether you work directly with the franchise or whether you work with a franchise broker, consultant, or coach.
Why would a franchise pay a broker? Franchises pay Franchise Brokers a commission because they help them to qualify and educate their candidates. When a franchise does the entire sales process on their own it can cost them up to 3 times more to award a single franchise – needless to say, they actually like working with franchise brokers to speed up their process of finding qualified franchisees.
When working with a Franchise Broker or Franchise Consultant, you can be more confident you’ll get a better shortlist of franchises to consider. However, you will not get the same quality of information from every broker. Make sure anyone giving you information has your best interest at heart. Be sure you choose one who really understands WHY you want to invest in a franchise.
The Importance of Inside Information - The real difference between franchise brokers and franchises.
Franchise Brokers are independent franchise salespeople. They are typically a member of a larger group or network representing hundreds of franchise concepts.
Determine if you have the available capital.
Determine if you are looking to purchase within 3 months.
Help you purchase a franchise so they can be paid a % from the Franchise Fee.
At The Franchising Company we have additional goals and motivation. We want to truly understand WHY you want to purchase a franchise. This helps us match you with the perfect franchise so you’ll not just be more successful, but you’ll have a better chance at a quicker ROI and actually ENJOY being a franchisee. We truly care about your success. Why? Because we love what we do, and we can't continue to do it if everyone we help isn't over the moon happy with our services.
What to look out for:
Many brokers are not trained in how to properly assess a franchise. The quality of franchise brokers varies greatly.
The point of a franchise broker is to educate, advocate, and support you with their expert knowledge. You should never be “shotgunned” out to franchises that waste your time. You should feel prepared, armed, and ready for any calls with a Franchisor.
Franchise Sales Representatives are people who work directly for the franchise in one way or the other. They work to qualify potential candidates and to take them through a single franchise’s sales process.
Determine if you have the available capital.
Determine if you are looking to purchase within 3 months.
See if you are the type of person they want to bring into their system.
They only represent one franchise and are looking to quickly see if they should invest their time in speaking with you.
They are compensated with a commission when you choose to purchase the franchise.
What to look out for:
Be aware that these are either employees or independent contractors working for the franchise system. This is a varied bunch. Some are absolute professionals and some are not. Some of them are extremely picky and won't let anyone into their system that is not a match. Those are our favorites. Others will let anyone in who can write a check. In systems like that, they are likely going to have to deal with some pretty challenging consequences both from the system breakdown, lawsuits and the other franchisees failures.
How you get the most value from the franchise selection process.
You can get a better deal on your franchise if you’re working with the right Franchise Broker.
When you work with us, you’re treated to a full-service, VIP experience all about finding your WHY and creating a perfect franchise match. We ensure from start to finish you’ll feel comfortable and organized as you’re introduced to each opportunity. When, and if, you decide to move forward you’ll have proof that your decision is right.
As you begin to narrow your search we’ll bring in our dedicated franchise attorney, accountants, and liability experts. You’ll be provided a free consultation with each of these experts to help determine if the opportunity is genuine, and a great fit for you.
Why Our Process is Different
The real story isn’t always easy to see. Therefore, you should feel confident that the franchise broker you’ll be working with has had the proper training to know what to look for.
We will be with you every step of the process - You should never be ‘handed off’ to a franchise to fend for yourself.
We will show you how to spot red flags
We will arm you with the right questions
We will give you franchises specific for your interest and situation
We will give you benchmarks for each franchise -not sales presentations
You will get a better experience AND a better franchise fit when you work with The Franchising Company.
Part 3: What's in it for You? Education & Access Matter
We have had over 200 hours of industry training and have helped countless franchisees just like you find the perfect franchise.
We give you access to:
Track Records on 2,500+ franchises
Funding Options & Accounting Services
3rd Party Grades on Franchises
There are over 4,000 franchises in the United States. 50% of them have 20 units or less. Nearly every day a new one hits the market. Some will be empire brands and others will be emerging.
Your job as you look through all the opportunities is to really ask yourself what your goals are. You must have a clear picture of what success looks like for you.
Often, people are looking at concepts they think they want but don’t really align with their financial situation or desired lifestyle. The most important thing you can do is keep an open mind and look at proven results.
Ask yourself these questions as you look at any franchise:
Could you imagine yourself running this business EVERY DAY?
How would owning this franchise impact your lifestyle?
This simple technique may open you up to concepts that you may not have even considered.
There is no one size fits all "PERFECT" franchise for anyone. The right option is the one that fits your goals, lifestyle, and desired work culture.
Just because you want to purchase a franchise doesn’t mean they will accept you.
You must be awarded the franchise. That is why it is so important to be prepared before any interaction with any franchise system. All too often people try to impress the franchisor and end up being denied. We help you put your best foot forward with the franchisor. We arm you with the right information to be accepted.
Part 4: Properly Vetting Franchises
The most important thing you can do is focus on quality brands with a proven track record. This doesn’t mean to only focus on McDonald’s or Subway. There are many quality brands with proven track records you may never have even heard of.
A franchise, by definition, is supposed to be a proven system - something that has been done successfully before and can be replicated. Obviously, the caliber and quality of franchises will be different across the board. The person you’re working with should ALREADY know which franchises winners and which ones are stinkers.
As you are introduced to franchises, ask yourself:
How has the person I am working with validated the concepts they claim to represent?
What are their standards? Can they prove it?
The Franchise Disclosure Document
Every year franchises are by law required to report on their successes and failures. This is for your protection and can be found in the Franchise Disclosure Document (FDD).
Getting into and understanding a 300 hundred page legal document, knowing what warning signs are, knowing what is normal and not normal, and understanding how and why they are presenting the data the way they do is not something you learn overnight.
Even the most successful franchise professionals may struggle deciphering the data within an FDD.
Many potential disasters can be avoided by having a franchise attorney review a franchise’s FDD. They are prepared on what to look for far better than a typical attorney.
The answers you want are often hiding in plain sight. Here are some of the ways to go about getting these answers.
Conduct multiple interviews with existing franchisees
Understand your target market based on facts
Have an actual franchise attorney review the Disclosures (FDD)
Understand how the franchise compares to other similar franchises
Finding the perfect franchise is almost more of an art than a science. We can help you uncover what franchise is best for YOU and arm you with the best information available. We’re here when you’re ready! It’s so easy to get started.