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Investigating a Franchise's Culture

What's just as important as how much money you'll make? Figuring out how well you'll fit in with the franchise's culture.

Q: I'm trying to choose between a few franchisors, and while each seems to be a great opportunity, I want to find a system that not only treats its franchisees fairly, but also has a great community and corporate culture. What information can the franchisor provide me that might indicate what their company's culture is like? How else can I get this information?

A: What a great idea. Not only are you looking for a franchise system in which you can make money--you want a franchise system you can fit well with, one that has a great relationship with its franchisees and that supports your social and charitable views.

Some companies, like Ben & Jerry's, wear their political, charitable and social viewpoints not only on their sleeves, but also on every part of their public face. A portion of their profits or marketing muscle is targeted to support and advance their pet causes. Often they ask their customers, their suppliers and their franchisees to support them in these worthwhile ventures. The hope is that like-minded people will flock to the company; they'll have a heightened camaraderie because of a similar focus and can ultimately make a bigger difference. The reality is that sometimes the strategy works, and sometimes the risk of alienating a significant portion of their potential customers has unintended consequences.

Other companies are just as passionate about doing good things but, for a variety of reasons, don't place those causes or issues front and center. They still commit significant resources to those good deeds. So how do you find out if a franchisor has not only a great relationship with its franchisees, but a culture that matches your political, charitable and social views as well?

Fortunately, the information is available and usually plentiful. Even before you began to look at any brand as a potential investment opportunity, you likely have shopped at their locations, seen their ads or read local news stories about events they and their franchisees supported. Franchise systems routinely enlist their franchisees in putting their locations on the frontline of supporting causes. Similarly, franchisees bring their franchisors and other franchisees to help them support charities. You'll see point-of-sale materials such as posters, coupons and cross promotions announcing the system's support and seeking contributions and help from customers.

If franchise systems are involved in such causes, they've invested some PR effort to get the message out to the public. Doing an Internet search for news stories about the franchisor is an important component of your due diligence. If you're interested in their social views, expand your search to include not only the company but its senior executives as well. See what the news tells you about where their hearts lie.

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