BY MARC KIEKENAPP | July 12, 2012
Looking for the best franchise for you and your family is a daunting task. When I grew up my parents taught me how to shop for groceries, cars and then eventually a home, but they never exposed me to the ins and outs of researching the large universe of franchises for sale. I purchased my first franchise in 1982, which, as you might expect was a low cost franchise. I faced the same challenges most of you are facing now, not really knowing where to begin. After all, in 1982, I didn’t have the luxury of being able to browse a multitude of franchise portals to preview the top franchises in the industry.
Over the past 25 years I’ve helped countless individuals find franchise opportunities that fit their lifestyle and meet their financial goals. Whether you are seeking a home based franchise, food franchise, or automotive franchise or whatever, your research should be very similar.
As with any research project you need to create a roadmap so you are certain to ask all the right questions and get “good” information during your research to assist you in making the right decision. There are 3 major areas you want to focus on:
- 1. Know Yourself
- 2. Know Your Market (does the concept work in your area)
- 3. Know the profiles of the most profitable franchises
Knowing yourself is the start to this process. “You are the key component to the success or failure of your franchise unit.”
- Are you in a financial position to invest in a franchise?
- Is your family supportive of franchise ownership?
- Can you manage several projects at the same time?
- Are you willing to follow a proven franchise system?
There are hundreds of franchise opportunities to choose from and if you understand what skills have made you successful in your prior business career matching those to the franchise system is the key. If you’ve been an accountant, IT systems person and don’t like selling and marketing, you need to steer clear of franchises that require skills you simply don’t have or don’t feel comfortable doing.
Know the market where you will be operating your franchise business:
- Is the franchise system operating in your area, or are you the first one
- Are you the last one in the market and is that good or bad
- Have an understanding of the competitive landscape
- Is the prime real estate available in the market that you need to succeed
Comparing your skill sets and strengths to the top franchisees in a particular franchise system will give you a good idea of whether or not you will succeed.
During your due diligence you need to discover who the top franchisees are and why they’ve been successful. Becoming a franchisee and joining a franchise system is much like choosing a golf club, a tennis club or your favorite gym. We tend to do our best and are most comfortable when we are working with or engaging with people like ourselves.
As you start the sales qualification process with franchisors you will have an opportunity to talk with franchisees. This step in the process will provide you with the most valuable information when selecting the right franchise opportunity for you. A list of franchisees will be made available to you through the FDD (Franchise Disclosure Document) at an appropriate time in the qualification process. Once you’ve received the FDD, I would suggest asking the franchisor if you can talk with different segments and levels of franchisees from the most profitable to franchisees that haven’t achieved the same level of success. This will help you determine what to do and what not to do.
Also request to speak with owners from similar markets, occupational backgrounds, husband and wife partnerships, and franchisees that may be absentee owners if that’s the investment route you are seeking.
This validation step is the most critical to your success. You need to align yourself with top franchise concepts that will allow you to use your skills and be within your financial budget. .
When you’re ready to make a decision, it is vitally important that you can look in the mirror and comfortably say, “ I am very passionate about this business. I will commit myself to its success by mimicking the most successful franchisees in the system.”
In summary, know yourself, know your market, seek out the most profitable franchises, work within your financial budget and make sure you have the passion to be the best of the best.