In my work as a Franchise Consultant, I talk with many potential business owners about a multitude of different franchise opportunities. Despite the wide variety of investigations, there is one common question that arises and is central to good decision making:
“Will this franchise be successful for me?”
Though no business is a guaranteed success, there are steps that you can take in your investigation that will greatly increase your likelihood of success. Here are 3 recommendations that will increase your odds of finding franchise success.
Match the Franchise to your Personal Skills, Resources & Goals
The consultation process that I work through with my franchise candidates is organized so that we can explore the details of each candidate’s skills, financial resources and goals. Further, we discuss various businesses to understand the operating and financial attributes most interesting to each candidate.
By combining these personal and business characteristics into a single model, we develop a picture of that candidate’s optimal business. From my experience, the closer we stay to this model when examining businesses, the higher the likelihood of success for the candidate.
For example, if a candidate does not have a strong background or interest in sales, I introduce that candidate to franchises that are marketing driven. Further, I only present businesses that are affordable to the candidate based on their budget and provide their desired income.
By screening carefully at the beginning of the process for businesses that are a close match for the candidate’s skills, resources and goals, it greatly increases the likelihood that the candidate will be a successful owner.
Review Item 20 in the Franchise Disclosure Document
One of the best resources you possess to plan for success in your franchise investigation is the Franchise Disclosure Document. This document is an extensive information sharing from the franchise company that offers you detailed information about the brand.
Within the FDD, Item 20 is the key disclosure relating to “Success Rates”. In this disclosure, you will find very detailed information relating to historical success rates of the company. The franchise company will present information, year by year for the past 3 years, that includes the number of open units at the start and end of the year plus changes through the year including openings, closures, terminations, transfers and re-purchases.
This detail provides you with objective data to understand the success rate of the brand. It also provides you with data that should prompt you to begin asking questions of the franchise development team about growth rates, prior failures and future expansion plans.
Use the Franchisee List for Full Validation
By far the most important task you can undertake to maximize your likelihood of choosing a successful franchise is to complete validation calls with the current franchisees. In the Franchise Disclosure Document, you will find a complete list of current franchise owners including their contact information. You should choose a number of these franchisees to interview to understand their experiences within the brand.
You will also find in the FDD the contact information for “former” franchise owners, those who have left the franchise system within the past 12 months. You are encouraged to contact these owners to understand their experiences – positive AND negative – with the brand.
By interviewing these franchise owners, you will understand in greater detail the success factors required within the franchise system. Knowing on a first-hand basis what it takes to succeed, you will then be able to evaluate if you have the skills and resources to be successful.
I am ready to help you explore franchising and find the ideal business for you. You can contact Chris Cynkar:
By telephone at 412-877-2000
By email at firstname.lastname@example.org
By visiting www.chriscynkar.com