By Kyle Zagrodsky
Franchises are everywhere, and they’re becoming more popular for people who want to start an entrepreneurial venture without as many of the risks and decisions involved in launching a business from scratch. People begin investigating franchises for all sorts of reasons, and if you want a great mix of independent responsibility and being part of a bigger team, it might be the perfect fit.
Because so many people are interested in franchising and because the business model works so well, the number of options for potential franchisees is daunting. Franchising has become such an enormously popular career path for so many companies that there are diverse options in everything from children’s enrichment to property management, spas, senior care, food service, and health and fitness. Once you narrow the franchise category to your primary passion, there are still plenty of choices left to make. Committing to a franchise means a big investment in resources plus the next few years of your life, so with lots on the line, how do you decide which franchise is the best buy?
Is the franchise growing?
Some franchises have built global names that are easy to recognize, but it’s important for franchise shoppers not to be too seduced by the comfort of an established brand. The most vital thing to focus on is whether the franchise is actually growing. How many new units opened in the last year, and how many are scheduled to open this year? Whether it’s large or small, if a franchise isn’t moving and selling, it might not be the right time to invest in it.
What’s the feedback from current franchise owners?
When you visit the franchises you’re interested in, find out what the current owners have to say about what the business is like to run and be part of. If the owner seems happy with their work, is optimistic about the present and future of their business, and tells a great story about the quality and availability of corporate support and structure, that franchise deserves one more green light on the road to making your decision. If the owner’s feedback is noncommittal or anything other than positive, let the search continue. (Also, remember to talk to multiple owners, and not just ones you might know already personally or through a friend. You want to get the most expansive picture possible of the business as a whole.)
Do you have a clear understanding of the support available to owners and staff?
Some franchises offer more support than others, and depending on your experience level in business and in franchising, finding a partner who offers the perfect amount of help could make or break your investment. Franchises are there to provide seamless structure, but it’s important to understand exactly how training and updates are conveyed. Find out what degree of outreach you should be able to expect from various levels of the organizations, and ask about features such as online support and training tools for both owners and staff. If it feels like you might be left to figure it all out on your own, keep looking.
What kind of business experience does the executive team have?
Regardless of a franchise’s age or size, you should get to know the executive team that handles the big decisions about how a business operates. An ideal executive team should be well rounded with professionals who have proven business skills in relevant arenas, from noteworthy business track records to personal franchising experience. If the leadership team is all rookies, the business could still become successful, but you’re more likely to learn hard lessons alongside them as they navigate the franchising world. Above all, choose to work with a leadership team that you’re comfortable with and believe in.
How much competition and market saturation is the concept up against?
Some franchise concepts and markets seem hotter than others on the surface, but popularity can soon become a double-edged sword. If there are too many new franchises or too many locations in one area, usually customers get bored and the business loses all sustainable health. Avoid franchises that could become another fading fad and investigate those that will deliver meaningful products or services now and for years to come.