1851 Growth Club: How Franchising Works and How to Make Your Decision

The publisher of 1851 Franchise and 1851 Growth Club CEO Nick Powills understands that as a prospective franchise buyer, there are plentiful opportunities available from the thousands of brands available. Franchisors are also eager to have you on board, specifically if you are financially qualified. 

“When you're financially qualified and ready to buy, you've cut through this giant line of people that are considering buying a franchise,” said Powills. “Now you're at the finish line.”

As you navigate this journey, it's important to recognize that when you fill out an inquiry form on a franchise website, you're not simply submitting information. You're entering the domain of a dedicated sales team whose livelihood depends on awarding franchises. That’s why Powills recommends holding off on the form, at least until you are ready to move forward. 

“If you’re not ready to have the conversation, don’t fill out the form,” he said. 

Take your time to gather information, research the brand online and message franchisees on LinkedIn to ask questions. At this point in the process, you should have already engaged in discussions with the franchisor, grown comfortable with the business concept and asked your questions.

Once you decide to fill out that form, they will assess your suitability, your plans for growth, financial capabilities and may even conduct personality tests to gauge compatibility for a long-term partnership. 

“It's almost like dating,” said Powills. “You're vetting each other out to make sure you're the right fit.”

Powills recommends exploring an investment that allows you to afford two or three units. Why? There is often a significant gap between signing the franchise agreement and opening for business, which can range from 30 days to a few years. 

“You’re going to feel like you’re bleeding cash,” said Powills. “You need to be properly funded to withstand this timeframe so that you don't get overwhelmed. Feeling overwhelmed can create significant knee-jerk reactions when buying or building a business, and those knee-jerk reactions can be the difference between good and great performance.” 

As you progress, you'll encounter franchise fees and royalties, which are typically non-negotiable. Evaluate the franchise carefully, including aspects such as supply chain efficiency and the dynamic of the leadership team. If you are feeling uncertain, never underestimate the strength of existing franchisee validation. If doubts continue to arise, don't hesitate to seek clarity from the franchisor. 

After your questions are answered, this is the time to move forward. While completing your due diligence is vital, Powills has an interesting take on prolonged hesitation — he compared it to his own experience jumping off a high dive at a community pool. 

“I walked up there probably 25 times before I jumped,” Powills said. “That's very similar to buying a business. If you keep on getting close and you don't go for it, you're going to constantly find reasons and excuses not to do this now. When you do that with a brand that's growing, you risk losing out on that opportunity because there could be another candidate ready.”

1851 Growth Club is here to help you be that “ready” candidate and assist you in navigating the complex process of buying a franchise. We have resources available on the 1851 Growth Club website and 1851franchise.com. 

For more information, click here.