The simple fact of the matter is that you'd spend the rest of your life trying to research the thousands of opportunities that exist in franchising. So the purpose of this section is to use some effective techniques to rapidly eliminate most of them from consideration--based completely on the work you did in Part 1.
As we get into this process, keep in mind that our goal is indeed to rapidly eliminate almost all concepts from consideration. We're starting with thousands of possibilities and we want to get down to one. We need a few fast tests to make most of them go away quickly.
Step 10: Decide if you want to continue this process on your own or get assistance. You can get help at any time, but it's best to decide immediately after you complete the personal evaluation whether you want to. Here's the scoop: Consultants at companies such as FranChoice specialize in helping you perform a self-evaluation, then narrow down opportunities to find a few that match whatever you're looking for. Their services are free to the consumer (the consultants are paid by franchise companies for providing the service), and they can save you considerable time and effort if the consultant is professional and effective. The following steps, however, assume that you want to conduct the process on your own.
Step 11: Establish the maximum investment criteria. Let's say you identify your maximum investment level as being $100,000. Making that one decision eliminates more than 80 percent of all franchise opportunities. Whatever amount you decide is right for you, just put it on the top of the list, since we don't need to spend any time at all on franchises that are above your level of investment.
Step 12: Establish the employee criteria. Let's say you don't want any minimum wage employees--again, that would allow you to quickly eliminate a majority of franchise opportunities. If your answer on this step is that anything related to employees is fine with you, then we just won't use it as an initial screening mechanism.
Step 13: Establish the selling aptitude criteria. If you aren't comfortable doing any selling other than waiting on customers from behind a counter, that allows you to eliminate most service-related franchises.
Step 14: Establish the hours of work criteria. One axiom for success as a franchisee is that you want to be at the business at whatever time the cash register is ringing the loudest. Assuming this is true, refer to your preference on the hours and days of the week you want to work. If you don't want to work evenings or weekends, that's going to allow you to eliminate many or even most retail businesses.
Step 15: List these four criteria that you've established on paper for easy reference.
Step 16: Look at industry segments first rather than individual companies. The four criteria you identified in the previous steps should allow you to quickly narrow down the total possibilities by 95 percent to 99 percent. Rather than looking at thousands of individual companies, you can use sources that have sorted all these companies into no more than a couple of hundred industry segments. With the exception of catch-all segments such as "other service businesses," you'll find that virtually every company in each industry segment is going to have the same basic characteristics as the others. For most industry segments, if you find that the first company listed doesn't meet your elimination criteria, none of the others will either, so you can skip over the entire segment.
One of the best sources of information on franchise opportunities organized by industry segments is Entrepreneur's Franchise 500®. You can easily scan through the entire listing by industry segment in a few hours. The Franchise 500® also lists individual companies for any segment that might be appropriate for you. See the listing at entrepreneur.com/franchise500.
Step 17: Do an initial scan, looking for completely obvious financial eliminations. If, for example, all the hotel chains have investment levels of over $1 million, and your maximum investment potential is $100,000, you don't need to spend any more time on that category--just cross it out and move on. Skip over any catch-all categories for now, too.
Step 18: Do a second scan of all the segments and think about the employee situations in those businesses. Figure out if they're complete disconnects with what you want. This shouldn't take more than a few seconds for most of the industry segments--again, just skip over any catch-all categories.
Step 19: Take a third look at the remaining industry segments while thinking about your selling aptitude and hours of work criteria. This may take a little more time than the first two elimination steps, and it's possible that you might not know the answer to one or the other without more investigation. That's fine--if you're not sure about a segment, don't eliminate it for now.
Step 20: Go back and look at each company in the catch-all categories, repeating Steps 17, 18, and 19 for each one. Cross off any eliminations you can make on a company-by-company basis.
Step 21: Now go back and review the remaining possibilities one last time. At this point, take time to really think about the industry segment or company. Do you have any status issues? Do you have any other considerations that might eliminate these as possibilities? If so, eliminate the concept or group and move on.
Step 22: Make a list of the industry segments and/or companies that made it this far. Split the list into two categories: ones you're sure meet your initial criteria and ones you need more information on.
Step 23: Do some quick research on all the industry segments on your second list. Look for the answers to any outstanding elimination criteria questions so that you can either move the industry segments to the first list or get rid of them. You can usually find what you need to know on the internet by searching the first couple of companies listed in the category. Follow this process until everything on the second list has either been moved to the first list or eliminated. As a general rule of thumb, at this point you should have narrowed down the franchise universe to a playing field consisting of a few industry segments (no more than 10).
Jeff Elgin has almost 20 years of experience franchising, both as a franchisee and a senior franchise company executive. He's currently the CEO of FranChoice Inc., a company that provides free consulting to consumers looking for a franchise that best meets their needs.