Go Beyond the Interview: How to Get a True Feel for a Franchise Don't buy a franchise without ticking off every item on this list.
This story appears in the September 2023 issue of Start Up.
If you've always dreamed of owning a business, becoming a franchisee might be the best decision you ever make. But before you dive in, it's important to understand the company you choose to join and how it operates. Here's a six-step guide to get you started.
Related: Is Franchising Right For You? Ask Yourself These 9 Questions to Find Out.
1. Do your own research.
Franchises are happy to send you information, but you should also research the brand on your own. A franchise's website typically contains its mission, background, vision statements, and any key milestones or accomplishments. Some companies post promotional or training videos that can give you greater insight into the company's culture, operations, and values.
Look through their social media accounts to gauge their public-facing personalities, and Google them for mentions in news articles or press releases. Assessing all of this will help you get a sense of whether the franchise is a fit for you.
2. Go to a Discovery Day.
Discovery Days are events designed for potential franchisees, where the brand showcases its business model and what it takes to be successful.
Whether in person or virtual, Discovery Days offer an excellent chance to meet with the franchisor and their team. Ask lots of questions! Here are some to get you started:
- What ongoing support and resources do you provide to franchisees?
- What are the costs, both initial and recurring, associated with becoming a franchisee?
- What are the requirements for becoming a franchisee?
- What are the expectations and performance metrics for franchisees?
- What is the company's growth strategy?
- What level of responsibility does a franchisee have regarding advertising and marketing?
- How much operational control does a franchisee have?
Related: 23 Questions to Ask a Franchisor When You Meet Face to Face
3. Meet current franchisees.
If you go to a Discovery Day, make sure to meet many of the brand's franchisees. Don't be shy! This is a normal, crucial part of the process. If you can't make it to a Discovery Day, call a few franchisees at their locations. Ask them about their experiences and challenges, for any advice, or things they wish they'd known when they were starting out. This is likely to be the most transparent evaluation you'll get.
4. Review the FDD.
The Franchise Disclosure Document (FDD) is a legal document that outlines pertinent information about the company, including the fees, costs, and obligations associated with being a franchisee. The franchisor is required by law to provide you with an FDD at least 14 days before you sign any agreement or invest any money. It's important to review the FDD carefully and ask questions about any terms or requirements you don't understand. Because of its complexity, the FDD is best reviewed with a legal representative of your choosing.
Related: 10 Tips to Go From Employee to Boss, From Franchisees Who Did It
5. Visit many locations.
Visiting locations in your area, as well as in other cities or states, can be an excellent way to see a brand in action and understand how it operates in different markets. For a complete picture, be sure to visit at different times of day. For instance, think of lunch and dinner rush times in food-service franchises.
6. Consider reputation.
Finally, having taken all of these steps, sit back and assess the franchise's reputation. Is it well-respected and recognized for its achievements? Has it received awards and accolades, or has it gotten some negative press? If it has Yelp pages, what are the reviews like, and how does the business respond to them?
Remember: When you join a franchise, your community will associate you with it. This is not just about caring what people think. Franchises that have a good reputation with customers are more likely to be caring toward their franchisees and to invest in operations. As an aspiring franchisee, that's the kind of support you'll want — and deserve!
