The goal in franchising, for many people, is to be able to follow a franchisor’s business model and see results. Instead of doing research and wasting money on trial and error, people figure, they can follow the franchisor’s system and bypass the hardest parts of starting a business.
This makes sense, and it’s one of the reasons that franchises have a lower failure rate than independent businesses. It requires trust, though. You’re putting your future on the line, and you have to trust your franchisor.
No franchisor can guarantee your results, but choosing a trustworthy company for your franchise investment gives you an advantage. We’ve compiled some signs of trustworthiness that can help you have confidence in your franchisor… or know that you can’t.
- They answer questions with direct answers.
During the franchise process, you’re going to speak directly with franchisor sales teams. While sales teams may have nothing to do with the actual day-to-day operations of the franchisor, they should still be upfront with their answers. If you’re serious about a franchise, ask for access to the people with whom you will be working and ask them the same questions you asked the sales team. If the answers match up and don’t beat around the bush, you’ve likely found a good partner for your future business.
Franchisors who can’t answer your questions fully and to your liking or who seem to make answers up on the fly aren’t great choices for franchise partners. If a franchisor balks at giving you access to your future teammates, they might not be serious about bringing you on or they don’t want you to know what those individuals have to say before you sign the dotted line.
- They make due diligence easy.
A good franchisor has nothing to hide. Every franchise has successes and failures—it’s really up to the acumen of the individual franchisees to make the system work for them in their location. But franchisors shouldn’t sugar coat the process or make it sound too good to be true. They also shouldn’t make it hard for you to find out information about what you can expect as a franchisee. If a franchisor has policies about not communicating secrets with outsiders, that’s one thing, It’s another when they tell you not to speak with other franchisees.
If you feel a franchisor is intentionally putting up a smoke screen to make it more difficult for you to learn about the franchise, it might be time to move on to something else.
- They don’t rush you.
Any salesperson is in a hurry to make a sale, but you shouldn’t be hearing, “Quick! You need to sign this document before we give away this territory to another franchisee!” Good franchisors aren’t in the business of first come, first served. Instead, they’re looking for the best candidates for the job, not who shows up first to get the spot. If a franchisor pressures you into signing quickly, be sure you’re asking the right questions. Keep in mind, too, that just because a franchise is selling like hotcakes doesn’t mean that it’s right for you. Everyone else might be asking the wrong questions. During the process, you’re likely to meet other potential franchisees. If you can, meet with them to hash through what your experiences taught you and make sure you’ve been asking the right questions.
