When you embark on a journey to evaluate potential franchise investments, realize that it is a multiple step process organized so that you can understand the entire business and are prepared to make an educated investment decision.
A proper franchise investigation process should begin with a personal assessment – of your skills, business ownership preferences and, short-term and long-term goals. Beginning with this self-assessment allows you to develop a multi-faceted framework against which you can compare franchise opportunities that you discover.
Once you have set a base for comparison, you are ready to initiate the exploration of franchise alternatives. The start of a franchise investigation process typically involves you working with a franchise development representative from the brand either one on one or in a small group setting. The franchise development representative will take time to present to you a steadily more detailed outline of all aspects of that franchise including, discussions around customers, employees, marketing, finances, and operations. From this educational process, you will begin to build a framework about how the business functions, the key drivers of success, and how you can operate successfully in the business.
But, discussions with the franchise development representative are not the only component of your brand discovery. In fact, the most important part is what comes next – “validation.”
During the validation process, you will spend time talking with current franchise owners to dig deeply into all the details of their ownership experience. The validation process can take many different forms, but most frequently involves one on one phone calls with current owners. If you are located geographically close to an existing franchise, you can often schedule an in-person meeting for 60 or 90 minutes to be able to see the business and meet the owner face to face. For some brands, particularly emerging brands with a smaller number of existing owners, it is common for the owners to make themselves available at pre-set times for small group conference calls to answer questions in a group setting.
Regardless of the form of the interaction, your goal should be the same – to validate that the experiences of the owner are consistent with the business framework presented to you by the franchise development representative. The owner conversations will help you to either prove or disprove the business framework that you develop earlier.
You should ask questions about all areas of the business including, training, marketing, customer acquisition, employee recruitment and retention, daily operations, and finances. Please keep in mind that all owners are unique with, some focused more on operations and others on sales/marketing. When you talk to someone, delve deeply into their expertise and discover more about other parts of the business from owners whose focus is there.
How much validation is enough? For most franchise candidates, they find that after 5-6 conversations, they can anticipate the answers and understand the business in enough detail that they can confidently build out their business plan. At that point, you may choose to loop back to the owners with whom you already spoke to ask some shorter, more pointed questions. But it is not necessary to continually ask the same questions.
The validation portion is truly the heart of the investigation process. It gives you a detailed look into the business from the owner’s perspective and allows you to build a more accurate image of how the business operates and keys to success within that franchise.
If you want to learn more about identifying franchise opportunities that are well-matched to your goals, visit www.chriscynkar.com.