Do: |
|---|
| Contact several current and former franchisees. Only they can give you an honest perspective on the franchise's potential earnings, duration of the startup process, and how well the franchisor fulfills its promises. Ask them: Would you buy into the same franchise again? |
| Hire an attorney and an accountant with experience in franchising. You can expect to run into entanglements that surpass the expertise of general practitioners, such as the fine print contained in the franchises' Uniform Franchise Offering Circular. |
| Look into the services of franchise consultants. Businesses like FranNet and FranChoice will use your personal goals, interests, and experience to find a franchise that may be a good match, at no cost to you. Be aware that they get paid by participating franchisors when a match is made, so do plenty of independent research to back up their suggestions. |
Don't |
| Let a brand name be your only guide. Just because you are passionate about a particular product or service, or like a particular brand name, doesn't mean that franchise will work best with your entrepreneurial goals. Know your goals and consider as many possibilities as you can. |
| Discount risk. Generally, newer franchises run a higher risk than more established ones—but not in every case. Investigate the history of your franchise candidates: What is the average turnaround period for franchises opening and closing? Have any franchisees filed lawsuits against the franchisor? Your job is to find out what the franchisor doesn't want you to know. |
| Place all your trust in one source. Franchisors, operating franchisees, franchise organizations, franchise consultants, and franchise attorneys can all be a help in your selection process, but you shouldn't let any of them push you too hard in one direction. |
Finding the Right Franchise for You
The Do's and Don'ts
By Douglas MacMillan
When becoming a franchisee, entrepreneurs frequently overlook factors that will contribute to their overall satisfaction. Rather than closely evaluating their own goals and management strengths, they may quickly pick a recognizable brand or listen to only one source. Robin Day Glenn, principal attorney for the Franchise Law Team, a firm that primarily represents franchisors, says it's key to talk to franchisees before making a decision. "A prudent prospective franchisee should phone as many…as their phone bill can bear, and if possible they should go see these people in person," says Day Glenn. Here's what else to consider when hunting for the right franchise for you.