How to Buy a Franchise: Doing Your Homework

Conducting due diligence and fully researching a franchise before committing to making an investment is arguably the most important part of the franchise buying process. This process not only ensures that you’re making a well-informed decision, but also plays a role in the long-term success of your business. 

In the latest installment of our “How to Buy a Franchise” Masterclass, 1851 Franchise publisher Nick Powills explains how you can go about conducting your research. 

Understanding Your Options

There are many ways you can conduct your research: you can utilize the internet, work with a franchise broker, speak to the franchisor directly and/or meet with current and prior franchisees. 

The internet is an incredibly useful tool in your journey, as it gives you an opportunity to explore the brand’s websites and learn more about its franchising system. You can also watch YouTube videos, or take to social media to read reviews and gain further insights into a franchise’s online presence, customer feedback and overall reputation. Although you can’t always believe everything you read, online reviews and discussions can offer a valuable perspective on both the positive and negative aspects of a specific brand. 

You can also seek out the professional assistance of a franchise broker or consultant. These individuals are seasoned experts with in-depth knowledge of the franchise industry. They can guide you through market trends, evaluate opportunities based on your preferences and streamline the decision-making process. However, it’s important that the opportunities provided by the broker align with your vision, mission and values. Many brokers are paid by franchisors to promote specific opportunities, so be sure to establish clear communication and work with a reliable broker that you trust. 

“Don’t let the franchise consultant or broker guide you to a brand based on how much they get paid,” said Powills. 

You can also engage directly with the franchisor to get a better grasp of the brand’s inner workings. Attending the Discovery Day, meeting the leadership team, and carefully reviewing the Franchise Disclosure Document (FDD) will provide you with invaluable insights into the franchise’s culture, operations and your expectations as a franchisee. 

Lastly, you should seek out current and past franchisees for validation. By speaking with the individuals who have taken the same journey that you’re now on, you can gain firsthand insights into the practical aspects of franchise ownership. They can tell you about their experiences, challenges and successes, and their real-world perspectives can help you make a well-rounded decision. 

Interested in taking the first step in your own franchising journey? We can help! Check out https://1851growthclub.com/ for more information.