Selecting a Franchise: Setting Goals to Signing on the Dotted Line, and Everything in Between

Opening a business is something that not everyone has the courage to do. That is why, when a prospective franchisee decides to move forward with the process, there is a lot of research and vetting involved. After all, would you put your life savings into something you didn’t feel absolutely sure about?

To make things easier on prospective franchisees who are trying to find the perfect franchise, 1851 Franchise Magazine connected with FranNet Franchise Consultants Mike Steiner and Heather Rosen, both who work with prospective franchisees to find the franchise that is the best fit, to hear more about the steps a prospective franchisee should go through before signing on the dotted line.

Lay out an ideal business plan

There are a number of reasons that people decide to become a franchisee, but one heard more often than not, is the proven system. Before it is possible to know if said proven system will help a prospective franchisee achieve their own personal goals, it’s important for each prospective franchisee to lay out a business plan identifying exactly what they want to get out of business ownership.

“This integrates their personal, professional, and financial needs,” said Steiner. “By going through this self-assessment, the client can make a determination if joining a particular franchise system is a good fit for them. They can ask themselves questions like, ‘do I fit in the culture of this business?’ or ‘Will I be passionate in this role?’”

Once those questions are answered and the personal goals align with the proven system, the franchisee should move on to additional vetting of the different concepts.

Do diligent research of different franchise options

With hundreds of thousands of franchise options to choose from, there may be more than one system that fits a prospective franchisee’s business ownership goals.

“I suggest having an initial search strategy,” said Rosen. “Don’t start with a bunch of businesses that are in the same industry. Start more broadly – for example, businesses that require the owner to take a more active versus a more passive role in selling the product or service. Or, businesses that are younger with less rules versus older with more rules. Some people will be happier with a franchise that gives them more choices, more creative control.”

Each prospective franchisee has different wants and desires when it comes to the business ownership. Once those specifics are narrowed down, and the prospective franchisee has a better idea of the type of industry they would like to move forward with, then it’s time for more specific research within the remaining franchises in the running.

“The two most important steps within the research phase, and the next step for a prospective franchisee that has decided on an industry, is to look at the Franchise Disclosure Document (FDD) and speak to existing franchisees,” said Rosen.

Be cautious with the use of internet research

As a prospective franchisee dives deep into vetting out different franchise concepts, Steiner has noticed a hiccup along the way.

“The internet is a double-edged sword,” explained Steiner. “People will do ‘research’ by finding articles or reviews about a business online and make decisions that may not align to whether or not that is the right business for them. It’s important to remember that every business has its strengths, weaknesses, opportunities and threats. If all of these are not analyzed, it may result in a poor decision to buy/not buy.”

Because franchises have multiple locations, sometimes hundreds or more, the internet can provide a skewed version of what business ownership would actually be like with the review of just one location. As hard as it is, it is sometimes easier to steer clear of this type of research and stick to the people that are more familiar with the ownership side of the franchise.

Look into nearby availability

One of the final steps in selecting a franchise, especially for those who are first time franchisees, is to see if there is availability nearby.

“Start close to home – don’t open your business too far away from the place you spend most your day,” said Rosen. “Your next location may be in the next state over, but your first location should be an easy commute from your house.”

Because business ownership often requires more hands-on time, having a location close to home eliminates time wasted commuting and allows franchisees to get to the location when assistance is immediately needed.

When making one of the biggest decisions in a lifetime, it’s important that each prospective franchisee takes the time to do diligent research before taking the leap into small business ownership. The process of selecting a franchise is different for each prospective franchisee, but by following the steps that Steiner and Rosen laid out, the prospective franchisee can feel more comfortable about the end decision.