1851

Buying a franchise may be the biggest purchase a person makes in their life. Besides buying a home, franchisees often invest on average $50,000 to $200,000 just to get started. This is exactly why it is important to do extensive research to make sure you are making the right decision for your wallet, life and your success.

Here are eight crucial steps to follow to ensure that the franchise you choose to invest in is the right one.

Learn Franchising 101

If you are not already well-versed on how the franchise business model works, it&rsquo;s worth taking the time to learn more about the industry in general. Paul Pickett, Vice President of Franchise Development at <a href="http://franchise.wbu.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=8-tips-for-conducting-franchise-research-to-make-a-more-educated-and-profitable-decision-9192" target="_blank" rel="nofollow" target="_blank">Wild Birds Unlimited</a>, recommends starting with Franchising for Dummies by Michael Seid. That&rsquo;s because in order to pick the right investment opportunity, you&rsquo;ll need to learn the basics.

John Armstrong, a consultant for FranNet, agrees.

&ldquo;For general information, the <a href="http://franchise.org/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=8-tips-for-conducting-franchise-research-to-make-a-more-educated-and-profitable-decision-9192" target="_blank" rel="nofollow" target="_blank">International Franchise Association</a> is a great place to start. At <a href="http://www.frannet.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=8-tips-for-conducting-franchise-research-to-make-a-more-educated-and-profitable-decision-9192" target="_blank" rel="nofollow" target="_blank">FranNet</a>, we do a lot of Franchise 101 and Careers in Franchise Ownership seminars and webinars to help educate people,&rdquo; Armstrong added. &nbsp;

Check out the brand&rsquo;s franchise website&nbsp;

Once you have found a brand you are interested in, it is important to take advantage of the free information the brand provides to learn as much as you. A franchise development website should provide a significant amount of content to help you make your decision.

&ldquo;If the brand is transparent in the beginning, then they will be transparent throughout the entire process. At Wild Birds Unlimited, we provide our full process with a checklist for the public to see,&rdquo; said Pickett.

Connect with current franchisees

Anyone who is currently running the business you are interested in should be able to tell you what it is really like on a daily basis. Whether you give the franchisees a call or go out to dinner with them, tapping into the existing knowledge of current owners can offer valuable insight into what running your business will look like and set realistic expectations before signing on the dotted line.

&ldquo;A potential franchisee should speak with eight to 12 franchisees--enough where the calls start to get repetitive. These calls should be an hour or more and can be with both active franchisees and those who left the system in the last three years. If they can visit an existing franchise and the location, that is ideal to see if they can visualize themselves in the business,&rdquo; said Armstrong.

Review the Franchise Disclosure Document

The FDD is a legal document that the FTC requires franchisors to provide to franchisees at least 14 days prior to a sale. While every item should be read and understood, Item 19 will provide you with financial performance representations, which may be one of the most important pieces to look at when considering your investment.

Be honest with yourself

With such a large purchase on the line, it&rsquo;s important to ask yourself the right questions. Is this a concept you&rsquo;re passionate about? And does it play into your own strengths? What are you good at and what will you need to delegate to others? If you don&rsquo;t answer these questions honestly, you probably won&rsquo;t make the right decision.

&ldquo;It&rsquo;s rare that we have anyone in our system who doesn&rsquo;t love our brand and our concept. Being aware of what you want and understanding your passion is an important step to take in the process,&rdquo; said Pickett.

Look at the <a href="https://franchisebusinessreview.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=8-tips-for-conducting-franchise-research-to-make-a-more-educated-and-profitable-decision-9192" target="_blank" rel="nofollow" target="_blank">Franchise Business Review</a> survey for the brand

Franchise Business Review brings transparency to the franchise industry by providing a forum for franchisees to rate their satisfactions with the brand.

&quot;If a brand isn&rsquo;t using that resource, or something like it, to understand how existing franchisees are answering the questions, then you need to ask the franchisor those questions yourself,&quot;&nbsp;said Pickett.

Learn and understand the financials

If you don&rsquo;t know the basics, you won&rsquo;t succeed--even with someone else&rsquo;s business model. It is key that you know your way around a Profit and Loss statement and a cash flow statement. Besides knowing the basics, you should build a financial model and work with a CPA to validate the success of your proposed model.

&ldquo;I always suggest a client send their built financial model to a few franchisees in the system that they are looking at. Franchisees in the business can provide the best feedback on the model,&rdquo; said Armstrong.

Hire a franchise attorney to review legal documents

Both Armstrong and Pickett suggest hiring an attorney that specializes in franchising as a part of the final steps in the process.

At the end of the day, there is never a 100 percent guarantee for franchise success and you should be prepared to deal with both success and failure with your business. But by following these eight important steps, you&rsquo;re arming yourself with all of the information you need to ensure that the odds are in your favor as you get your new business up and running. &nbsp;

8 Tips for Conducting Franchise Research to Make a More Educated and Profitable Decision

1851 Franchise

While there are no guarantees in business ownership, these eight tips will help set up any potential franchisee for success.


This brand page has been paid for by 1851. Content within this page that is paid will showcase a Sponsored icon. This means the brand has engaged 1851 FRANCHISE to write the content. Content without the Sponsored Icon is aggregated media placements the brand earned. Questions can be sent to editorial@1851franchise.com

8-tips-for-conducting-franchise-research-to-make-a-more-educated-and-profitable-decision

TruBlue Home Service Ally

TruBlue’s Home Maintenance Plans: Peace of Mind for Homeowners

trublues-home-maintenance-plans-peace-of-mind-for-homeowners

Caring Transitions

Caring Transitions Targets Peoria, Illinois, for Franchise Growth

caring-transitions-targets-peoria-illinois-for-franchise-growth

Caring Transitions Celebrates a Strong Start to 2025 With 19 New Franchise Sales and Momentum-Building Training Events

caring-transitions-celebrates-a-strong-start-to-2025-with-19-new-franchise-sales-and-momentum-building-training-events

Right at Home

Right at Home 30th Anniversary in Home Care with Right at Home Logo

Celebrating 30 Years of Excellence and Future Innovations in Home Care

celebrating-30-years-of-excellence-and-future-innovations-in-home-care

Why TruBlue is the Ideal Franchise for Multi-Unit Owners: Scalable Growth With a Purpose

why-trublue-is-the-ideal-franchise-for-multi-unit-owners-scalable-growth-with-a-purpose

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

DoorDash Expansion Could Reshape Delivery and Operations for Franchise Brands - 1851 Franchise

DoorDash Expansion Could Reshape Delivery and Operations for Franchise Brands

doordash-acquistions-deliveroo-sevenrooms

Crumbl Franchise Investment - TSG Consumer Partners -  1851 Franchise

TSG Consumer Partners Takes Minority Stake in Crumbl, Signaling Franchise Growth Potential

crumbl-franchise-investment-tsg-consumer

Yum Brands Reports Strong Q1 Results with Big Boost from Taco Bell

yum-brands-reports-strong-q1-results-with-big-boost-from-taco-bell

QSR: McDonald’s Gains Momentum With Chicken Innovation, Value Deals and Franchisee Support

mcdonalds-franchise-recovery-chicken-strategy-value-deals-2025

The Future of Franchising: Trends and Predictions for 2025 and Beyond

the-future-of-franchising-trends-and-predictions-for-2025-and-beyond

Layoffs Surge to Pandemic-Era Highs, Opening Doors for Franchise Growth

layoffs-surge-to-pandemic-era-highs-opening-doors-for-franchise-growth

Franchisee spotlight image with Randy and Sandy Craft, Children's Lighthouse logo on blue background

The Crafts’ Successful Journey from New Parents to Children’s Lighthouse Franchisees

the-crafts-successful-journey-from-new-parents-to-childrens-lighthouse-franchisees

Franchisee spotlight graphic with photo of Amy Lepke and family and Papa Murphy's logo

After 14 Years as a Stay-At-Home Mom, Amy Lepke Returned to Papa Murphy’s — This Time as an Owner

papa-murphys-franchise-amy-lepke

Franchisee Spotlight with Micki Waters and Papa Murphy's Logo

Work Mom: How Micki Waters Became a Mother Figure to Her Entire Papa Murphy’s Team

work-mom-how-micki-waters-became-a-mother-figure-to-her-entire-papa-murphys-team

District Taco Franchise Costs, Fees, Profit and Data for 2025

franchise-deep-dive-district-tacos-franchise-costs-fees-profit-and-data

Franchisee spotlight image with photo of Robert Trujillo and UWRG logo on blue background

How Robert Trujillo Expanded His Construction Business With UWRG

how-robert-trujillo-expanded-his-construction-business-with-uwrg

8 Tips for Conducting Franchise Research to Make a More Educated and Profitable Decision

MORE STORIES LIKE THIS