What to Expect From a Franchisor
Q: I've noticed that the franchise companies I've looked into seem to offer quite varied programs in terms of training and support services for new franchisees. What is the standard I should expect from a quality franchisor?
A: There are going to be variances from industry to industry because of the nature of the business. The bottom line is that you should expect to receive assistance and expertise for all the factors that are important in opening a new unit in any franchise. The following list includes some common areas:
- Location assistance. The typical support, for any business that is site-dependent, should include guidelines for locating a good site and checking its viability. There should also be guidelines for the general terms of a lease agreement that are standard for this business in this type of a location. Great support would include an on-site review by the franchisor of any proposed site and direct assistance in the negotiation and execution of the lease.
- Construction assistance. The typical support should include detailed instructions outlining all the components that need to be ordered and assembled to build the business as well as sources for each component. Great support will include direct ordering and construction assistance and perhaps turn-key store delivery to the new franchisee.
- Marketing assistance. The typical support will include a complete marketing plan for the new business that covers all activity for at least the first three months of operation. This plan should include the timing, promotional material and costs for every effort to be made during the plan. Great support would include franchisor representatives actually booking the advertising for the new franchisee to make sure nothing is missed.
- Training-operations. The initial training should cover all aspects of the operation of the business unit, with enough repetition so that new franchisees are able to operate the business from the day they open the unit. Great support would involve the franchisor sending an experienced operation's staff person to assist in the on-site operations of the new unit for as long as it takes to make sure the competency actually exists.
- Training-other. The initial training should also cover all the other issues associated with the operation of the business. These would include aspects of the business related to recruiting and retaining employees, back-office bookkeeping and other record-keeping. You should also receive complete written documentation on all of this training in the form of reference manuals or other written materials.
The items listed above are just the basics. You will also need assistance and support in relation to dealing with governmental agencies for permits and signage. A more complicated business like a restaurant is also going to have numerous health-code compliance issues and other matters that you'll need help dealing with.
The most important thing you can and should do in the investigation of any franchise opportunity is to talk at length with existing franchisees of the system. In reference to support issues, you need to carefully explore how prepared they were to operate the business after the support was delivered by the franchisor.
Just ask them the question. Find out what their biggest surprise was. Ask what they would do differently now that they've gone through the process for themselves. Get a good idea of how prepared they felt both before and after their unit opened. If everything was great (other than the minor stuff that always happens), then you've probably found a company that's focused on delivering great support to new franchisees.