The following excerpt is from Rick Grossman’s book Franchise Bible. Buy it now from Amazon | Barnes & Noble | iTunes | IndieBound
Limited-Time Offer: Franchise Bible, 8th Edition available for $2.99 on Amazon Kindle (U.S. only) through August 31
In order to find the franchise that will be a good fit for you, you should pursue a more established course of action often called the discovery process. Outlined below is the eight-step process used to find the franchise opportunities that best fit your skill set, experience, and goals.
Related: Are You a Good Franchise Candidate?
1. Define your goals.
What are the reasons that caused you to consider franchise ownership in the first place? They can include the desire to be your own boss, the desire to better balance work and family, the interest in using your own skills to build your net worth and other similar factors. Be brutally honest. This is the time to look deep into yourself to locate your true desires. Setting goals is an important starting point for your business.
Many people set goals only to fall short and give up. This reinforces negative feelings instead of resulting in positive achievement. You can apply the following three goal rules to increase your success:
- A goal must be realistic and attainable. Challenging is good, but you’ll quickly lose interest if it’s out of reach.
- A goal must be specific and measurable. “I want to be rich someday” is neither. “I will have $1,000,000 in the bank by the time I turn 50” is better.
- A goal must be something that you want. Nobody can give you a meaningful goal but you.
2. Identify some franchise options.
Do your homework to identify an initial group of franchise opportunities that meet some or all of your criteria. It’s good to have at least a few options to compare. Look into franchises that interest you and ones that you can see yourself running. Consider the “day-in-the-life” of the operators to make sure you can visualize yourself in their place.
The first place most people search for franchise opportunities is online. This method can be somewhat frustrating due to the vast number of options available. It’s also challenging to discern between different types of franchises.
Narrow the field by evaluating what type of business and investment range are compatible with your lifestyle before you begin your internet search. At this point, you may also choose to work with a qualified franchise broker to help you narrow the field and assist you through the discovery process. Most brokers work on commission paid by the franchisor. Make sure that the broker has a good track record and experience in the franchise industry. They may be able to help you with financing, site selection and other elements of your business launch. If you use a broker, they should help and advise you through the balance of the discovery process.
3. Make initial contact.
See how the franchisor handles your inquiries. If you get sent to voicemail, note how long it takes for them to return your call. Don’t hesitate to ask to talk to different members of their organizations to get a feel for their company cultures. Keep track of how the initial communication with the franchisors play out:
- Did they answer the phone live with a professional greeting?
- Were you able to talk to someone in the franchise sales department immediately on the first call attempt?
- Did they answer all of your questions to your satisfaction?
- Did they ask for your information?
- Were they courteous, professional and interested in you and your needs?
- Did they offer the next steps? That is, did they send you information?
- How do you rate them each on a scale of 1 to 10 (ten being best)?
4. Identify their processes.
When you contact a franchisor, ask them to outline their franchise sales and qualifying processes. This will help you stay on track and ensure progress. Be wary of companies that don’t seem to have any systems or process for you to follow. A franchise opportunity should be all about systems, on all fronts.
5. Evaluate the franchise documents.
Once you’re received the franchise disclosure document (FDD) and the franchise agreement from the franchisor, it’s a good idea to have a qualified franchise attorney review the franchise disclosure documents with you. A standard business attorney may have little or no experience in franchising and could end up costing you more money and time since they’ll need to learn the industry.
6. Interview existing franchise owners.
The franchise owner list must be included in the FDD. If it’s missing, it’s an incomplete document. Contact the franchise owners to see how they’re doing. Ask questions about the pros and cons they’ve discovered about owning this franchise.
7. Attend discovery day.
Most franchisors hold regular discovery or decision day events. This gives you a chance to visit their headquarters and meet their team. These events are opportunities for both the franchisor and you to really size up the potential business relationship. Make no mistake: They’re looking closely at your personality, your manner of dress and all of the other social cues that exist whenever you first meet someone. You, of course, should do the same. As they must feel comfortable with you, you must be comfortable with them. Remember that you may be in business with them for five or even 20 years, depending on the franchise opportunity. This is a decision that must sit comfortably with you on an emotional level as well as a business and financial level.
8. Execute the franchise agreement.
The very last step is to execute the franchise agreement and related documents attached to it. Be sure to file your copy of the executed documents for future reference.