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While there is no such thing as a crystal ball (from what we found in our research), franchising provides the closest thing in the form of a Franchise Development Document (FDD), an established operating model and a network of franchisees that can help in more accurately projecting growth.

&ldquo;It&rsquo;s much easier to plan your growth trajectory in a franchise than in an independent business. You already have a lot of info around projections based on what is in the FDD,&rdquo; said Bill Bass, chairman and co-founder of Black Wolf Group, which owns and operates <a href="https://franchise.twomenandatruck.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=buying-for-the-future-how-to-project-growth-in-a-franchise-2705156" target="_blank" rel="nofollow" target="_blank">Two Men and a Truck</a> and <a href="https://franchise.brightstarcare.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=buying-for-the-future-how-to-project-growth-in-a-franchise-2705156" target="_blank" rel="nofollow" target="_blank">BrightStar Care</a> franchises.

Item 19 in the FDD is one of the best starting points to determine what growth could look like as a franchisee. It contains financial performance information and information regarding unit performance.

&ldquo;The FDD is standardized throughout the whole document; the Item 19, however, is purely unique for each franchise,&rdquo; <a href="http://www.nolimitagency.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=buying-for-the-future-how-to-project-growth-in-a-franchise-2705156" target="_blank" rel="nofollow" target="_blank">No Limit Agency*</a> Chief Development Strategist Sean Fitzgerald said. &ldquo;You&rsquo;re no longer comparing apples-to-apples. The Item 19 is a great tool to gauge a brand&rsquo;s track record and where it will be heading in the future.&rdquo;

When reviewing the FDD, the Item 19 specifically, the <a href="https://www.ftc.gov/tips-advice/business-center/guidance/consumers-guide-buying-franchise?utm_source=1851franchise.com&utm_medium=article&utm_campaign=buying-for-the-future-how-to-project-growth-in-a-franchise-2705156#evaluating" target="_blank" rel="nofollow" target="_blank">Federal Trade Commission</a> advices that you consider and ask more in-depth questions about the following:

<ul>
	<li>Is the Earnings Claim Typical for a Franchise in this System? &ndash; The claims could be deceptive if it doesn&rsquo;t represent the typical earnings of franchisees.</li>
	<li>Average Income &ndash; The figures could make it look more successful than it is because a few select franchisees could be skewing the average.</li>
	<li>Gross Sales &ndash; If a certain location has high gross sales, it would be wise to look into what their expenses are to gauge how profitable they are.</li>
	<li>Net Profits &ndash; Franchisors won&rsquo;t have franchisees&rsquo; net profits data so if they provide that info in the FDD, ask if it&rsquo;s based on company-owned outlets.</li>
	<li>Geographic Relevance &ndash; When reviewing franchisee sales or income figures, be sure to ask if any of the supporting data came from franchisees in your area.</li>
	<li>Reliance on Earnings Claims - Franchisors may ask you to sign a statement &mdash; sometimes presented as a written interview or questionnaire &mdash; that asks whether you received any earnings or financial performance representations during the course of buying a franchise. If they told or gave you any information about how much your franchise may earn, report it fully on the questionnaire or other statement. If you don&rsquo;t, you may be waiving any right to contest the earnings representations that were made to you and that you used to make your decision to buy.</li>
</ul>

While the FDD provides a lot of information, nothing can replace validation from other franchisees.&nbsp; The franchisor has a standardized operating model that franchisees are expected to execute against so it allows for more of an apples-to-apples comparison when it comes to financial forecasts.

&ldquo;With franchising, you can benchmark against people that are doing the exact same thing&hellip;. Two Men and a Truck has over 300 franchisees so it gives you tremendous benchmarks to establish success for your business,&rdquo; said Bass.

Chad Tramuta, <a href="http://www.smoothiekingfranchise.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=buying-for-the-future-how-to-project-growth-in-a-franchise-2705156" target="_blank" rel="nofollow" target="_blank">Smoothie King</a> Franchise Development Manager, advices prospective franchisees to view a franchise opportunity as a long-term investment and to project the potential for growth accordingly.

&ldquo;Franchising should never be seen as a flip or short-term business. Find a brand you believe in and want to be a part of for the long-term.&rdquo;

Buying for The Future: How to Project Growth in a Franchise

1851 Franchise

There are no guarantees in life or business, but a franchise opportunity can give you a leg up in projecting growth. 

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