Investing in a franchise is a huge leap for any business owner, whether you’re a wide-eyed newcomer or a seasoned veteran. With hefty stacks of paperwork and a maze of industry jargon, the initial stages of becoming a franchisee can be intimidating to say the least. That’s where due diligence comes in—basically, checking balances and verifying facts before embarking on this monumental pursuit.
Buffalo Wings & Rings is a proponent of due diligence, as a franchise agreement involves the franchisor as much as it does the ‘zee. The sports restaurant brand wants all of its franchisees to be aware of the commitment that comes with owning a franchise, putting prospective new additions in a position to succeed. Here are five tips for performing due diligence on Buffalo Wings & Rings.
Determine the sources of your motivation. Deciding to franchise is not a decision to be taken lightly. Determine why exactly you want to delve into the industry, as well as why you chose Buffalo Wings & Rings as your top prospect. By weighing the strengths and weaknesses of a brand, you can gain a fully comprehensive look at Buffalo Wings & Rings as an investment.
This analysis shouldn’t be isolated to just numbers—get personal with your evaluation. Are you intrinsically or extrinsically motivated? Are you seeking a built-in business plan, or are you hoping to dial in managers for the day-to-day tasks. Answering these questions before diving into franchising will refine your wants and needs.
Define your limitations. A testament to the robustness of the brand’s business model, many BWR franchisees own multiple units. Are you looking to grow an empire from sea to shining sea? Or are you more content with managing a one-stop shop in your hometown? Defining how far you want to expand you franchise and how it fits into the BWR mission is crucial in measuring your success. By assessing your commitment to the brand, you can prepare for some future speed bumps.
“The hardest part about owning multiple units is getting through the first one,” Buffalo Wings & Rings president and CEO Nader Masadeh said. “When you have two or more stores, you have the flexibility of interchanging employees and leveraging some services you might be localizing, such as payroll and accounting.”
Read the franchise agreement. Then read it again. While Buffalo Wings & Rings has been fine-tuned for success, it’s important to be aware of the business’s building blocks. Much of this information can be found in a Franchise Disclosure Document, along with other franchisee materials.
Extensive as it may be, reading all key documents synonymous with franchise ownership is crucial. Don’t know where to start? 1851 Franchise details 10 things you should know from your FDD and doles out some tips on conducting further due diligence.
Check in with existing franchisees. Chatting with a handful of people helps, but it doesn’t quite do the trick. Extensively chat and network with existing franchisees to gather an accurate and detailed perception of what it will be like to become a BWR franchisee. Go to conferences and survey your possible future colleagues. Are there any common words of advice? What are some common setbacks that a majority of franchisees seem to face?
While scouring LinkedIn and attending networking events can help catalyze the process, some franchisors even house databases of current franchisees for such purposes. Buffalo Wings & Rings has a comprehensive database of ideal franchise locations and aids the franchisee in site selection.
“The idea is to use information from this database so when franchisees are submitting new locations, we can get information on the area and compare it to historical data,” Buffalo Wings & Rings chief development officer Philip Schram said.
Evaluate the business—then evaluate yourself. By now, you’ve probably sifted through business plans and read executive summaries and chatted the ear off any franchisee within arm’s length of you, so now it’s time to turn the conversation inward. Evaluate what you can offer the brand and how its resources complement those strengths. At the end of the day, a franchise agreement must be beneficial for both parties.