5 Things That Typically Happen When I First Inquire About Owning a Franchise

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5 Things That Typically Happen When I First Inquire About Owning a Franchise
5 Things That Typically Happen When I First Inquire About Owning a Franchise
You’ve done the work of looking through potential franchises to buy. You’ve got a list, and it’s time to reach out. Then what happens?

1. I express interest. “The procedure is pretty much the same,” said Dan Doulen, Director of Franchise Development with Buffalo Wings & Rings during an interview with 1851 Franchise. The “process” Doulen is talking about happens when a perspective franchisee inquiries about buying a franchise. “Much of the time, the inquiry is completed through a form on the franchise’s website,” he later explained.

2. The franchisor responds. After the franchise receives the notice about a candidate’s interest, the candidate should expect a quick response from the brand via phone call or email. Paul Pickett, Chief Development Officer at Wild Birds Unlimited, explains “the call is to make sure the basic foundation is understood.” That basic foundation consists of a financial understanding of what it takes to open the business, understanding of the market or territory the candidate is inquiring about, and understanding the franchise’s culture and whether the candidate is a right fit. “It’s a tennis match in conversational form,” says Pickett as he explained how a productive, two-sided conversation is needed.

3. We validate each other. After the primary phone call, the candidate and franchisor enter a “validation process,” as Pickett calls it. The validation process consists of many important meetings and conversations to make sure the candidate and the franchisor are on the same page. The most important part of a franchise’s validation process is going through the FDD (Franchise Disclosure Document). Barry Maring, who is currently a franchisee for Right at Home, but has history with brands like Del Taco, Pizzeria UNO & DUE and Subway, says the FDD contains “…A plethora of other important information about the franchisor. Part of this information will be list of existing franchisees, and how many franchises there are by state and how many have opened or closed within the timeframe given.”

4. We go through more due diligence. Throughout the FDD review, the candidate must go through a due diligence step in which, “a prospective franchisee should align themselves with a lawyer. We recommend they get an attorney with franchise experience,” explains Pickett. On top of that, if the brand uses brick and mortar locations as its franchise, it is helpful to talk to a real estate lawyer.

5. I speak with existing franchisees. The list of existing franchisees within the FDD is also critical to the validation process, Maring mentioned. Many brands make the candidate speak with a number of franchisees before moving onto the next step. Wild Birds Unlimited “requires they speak to a minimum of 10 existing franchisees,” says Pickett. Aligning yourself with the right people is key to success within the franchising world. Getting advice from people who have already been through the process can give light to ideas and problems that the franchisor did not spend time on, which can ultimately make or break the decision. From connecting with existing franchisees, a candidate can get a true understanding of the day to day tasks he or she will potentially encounter as an operator of a franchise.

5. I decide if this franchise is for me. The process between the inquiries to the sale varies depending on the franchise. A franchise with a simple business model may take up to thirty days, but the recruitment of a complex franchise and system can last up to a year. 

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