Guide to Buying Another Franchise: How to Evaluate the Leadership of a Brand

Expanding your franchise portfolio is an exciting opportunity, but it comes with significant challenges and considerations. At the end of the day, franchising is like a marriage — the franchisee needs to feel supported and trusting of their franchisor. Strong leadership is basically a non-negotiable — it will make the difference between a thriving franchise and one that struggles.

Here are some best practices and tips for determining whether the culture and support offered by a franchisor is right for you.

1. Assess the Leadership's Experience and Vision

When evaluating a potential franchise, it's essential to look at the leadership team's background and vision for the brand. 

While much of this information can be found in Item 2 of the brand’s Franchise Disclosure Document (FDD), it's important to dive even deeper. Look up the executives' LinkedIn profiles, read news articles and check for any industry awards or recognitions. Understanding their past achievements and any challenges they’ve overcome can provide insights into their capability to lead the franchise. Investigate the franchisor's strategic vision. Are there clear plans for growth and innovation? How do they plan to navigate industry trends and economic shifts? 

“Evaluating leadership, brand support and historical performance is crucial before investing,” said Usman Rao, a multi-unit franchisee with Sky Zone Trampoline Park. “Research successful individuals at the company — in my case other franchisees. Are they still growing? What can you learn from their success?”

Like Rao says, talking to existing franchisees about their experiences with the leadership team is key. Ask about the level of support provided, the responsiveness of the corporate team and any changes in leadership that have impacted their operations.

2. Look for a Strong Support System

A franchisor with a robust support system can significantly ease the challenges of running a franchise. It's essential to evaluate the depth and quality of the support offered to ensure your success. This support can encompass training, marketing, operational assistance and ongoing guidance.

Item 11 of the FDD outlines the support services provided to franchisees. Pay attention to details about training programs, marketing support and operational assistance. Reach out to existing franchisees to get firsthand accounts of the support they receive. Ask about the effectiveness of training programs, the responsiveness of the franchisor’s support team and any challenges they’ve faced.

Julie Carter, the owner of Children’s Lighthouse of Oak Point, says the comprehensive support from her franchisor was the only reason she could transition from a background in accounting, finance and insurance to successfully managing a childcare business.

“I honestly never thought I would be a business owner, and without all of the processes that Children’s Lighthouse has in place, I wouldn't have been able to do it,” said Carter. “Over the past seven years, I've found that if you adhere to the established processes, there's a high likelihood of developing a well-rounded center that attracts families. Everything is planned out for you from start to finish. Everyone on the team has extensive experience, but this isn’t a big conglomerate. This is a family-owned business and they have been by our side every step of the way.”

3. Evaluate the Brand's Culture and Values

Beyond support, the culture and values of a franchise brand play a significant role in the overall franchisee experience. 

Taylor Thomas, a seasoned entrepreneur with a deep-rooted history in the franchise industry, recently signed a whopping 25-unit deal with Layne's Chicken Fingers, the Soon to Be Famous™ chicken finger franchise. As someone intimately familiar with the restaurant industry, Thomas knew there was no shortage of options. Sure, the financials might be attractive or the unit count may be impressive, but Thomas knew he needed more than that to go off of. 

“When we first started looking, we were only looking at major brands,” Thomas said. “But we realized that the bigger the brand, the more likely that family-owned atmosphere goes away. There was a disconnect there. We want to feel like we can bounce off ideas and help the whole brand grow. The restaurant business isn’t easy — it never has been — so it's important to have that collaboration between the franchisee and franchisor.”

When it comes to that collaborative, family-like culture, Thomas says meeting with the leadership team gave him all the insight he needed. 

“[Layne’s CEO] Garrett [Reed] brought his son along, which I thought was great — we hadn’t experienced a family-owned business in a long time,” he said. “That was a big positive for us.” 

While determining the culture of a brand can be a little more challenging than simply reading a section of the FDD, visiting the franchisor's headquarters and spending time with the leadership team can go a long way. Observe their interactions with employees and franchisees to get a sense of the company culture. Similarly, participate in discovery days or similar events where you can meet the leadership team and other franchisees. These events provide an excellent opportunity to ask questions and see the culture in action.

Ask current franchisees about their experiences with the brand's culture as well. Do they feel supported and valued? Is there a sense of community and collaboration? Assess the brand’s involvement in community initiatives and social responsibility. A brand that actively engages in community service can be indicative of a strong, value-driven culture.

A Lasting Partnership

Remember, the standard term for a franchise agreement is 10 years. That's a long time! Just as in any successful partnership, the relationship between a franchisee and franchisor must be built on trust, alignment of values and a shared vision for growth. By thoroughly assessing the leadership's experience and strategic plans, ensuring the franchisor offers a robust support system and evaluating the brand's culture and values, you can make an informed decision that sets the stage for long-term success. 

Every great franchisee had help buying a franchise. Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit www.1851growthclub.com and start your journey.