Franchise Buying Guide

A Perfect Match

Elements of a Promising Franchise
Presented by Guidant Financial
Guidant Financial specializes in helping entrepreneurs purchase new franchises using their retirement funds.

Regardless of whether a franchise is new or established, it's important portant that it has made its mark with a niche in its industry and that it is still open for growth.

After deciding to buy a fast-food franchise, the Millers narrowed their choice down to Blimpie because the company hadn't already oversaturated the market in their town.

"There was a burger joint on every corner, but the sub-and-salad market was still really open," says Miller. "From our research, we could tell that Blimpie was set for growth. So far our predictions have come true. We've just opened a second store."

Another important consideration is the relationship between the franchisor and its franchisees. "A golden rule is that the franchisor should treat the franchisee as a working partner, and never like someone they look down on," says Campbell. "The franchisor has to understand the equation of franchising, and that the franchisee is the most important part of that equation."

A big part of Bauguss' evaluation of Impressions On Hold involved taking a close look at the relationship between the franchisees and the franchisor.

"I really liked the fact that they are dependent on their franchisees," Bauguss says. "They couldn't exist without us, and we couldn't exist without them. The relationship is win-win."

To find out what the relationship is like between franchisees and franchisors in a particular system, talk to existing franchise owners and visit the corporate headquarters to meet with company officials.

"Don't talk to salespeople, who you'll probably never see again," says Siebert. "Meet the people you will be working with. Make sure that you have confidence in their ability and product, and that you can get along with them, because this will be a long-term relationship."

When he was deciding whether or not to purchase a Connoisseur franchise, Dunkle and his wife flew to Southern California to meet with the company's president, Sandy French.

"After meeting with Sandy, we knew the business was right for us," says Dunkle. "Sandy allows creativity within certain guidelines, which really appealed to us. I could tell that the opportunity was very much a win-win, team-oriented one."

When calling existing franchisees, don't ask them easy questions such as, Do you like the franchise? "Ask quantifiable questions, such as: `How much support do you get from the franchisor?'" suggests Siebert. "How frequently does a company representative visit? What services do they provide to you? How much money are you making? How long did it take you to break even?"

Miller called 30 franchisees before deciding to buy a Blimpie sandwich shop. "I asked them a lot of questions, such as if they were happy with what they were doing, what their sales and expense numbers were and what kind of support they got," she says.

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This article was originally published in the July 1997 print edition of Entrepreneur with the headline: A Perfect Match.

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