When The Empowered Franchisee team works with a franchise candidate, we always start with a self-assessment. After all, before we can help someone find their franchise match, everyone involved has to know what we’re matching. Only after the candidate has completed this step do we move on to the process of evaluating franchises. As we go through the process, we encourage our candidates to dig deep, to ask plenty of questions about the franchises they’re considering. After all, this will be one of the biggest investments of their lives.
The exact questions to ask vary by candidate, depending on their specific circumstances. But there are five key questions that are useful to pretty much any person who’s evaluating franchises.
Does this franchise fit my lifestyle?
Franchise candidates often come to us because they want to remake their lifestyle. People who have always worked in corporate jobs, especially, are often seeking a different relationship between life and work. Any kind of franchise will achieve that goal to some extent, since all franchise owners are entrepreneurs with more freedom and control than a corporate employee. However, different franchises will still affect your lifestyle in different ways.
As you evaluate franchises, make sure that the lifestyle the franchise requires is one that fits you and your family. A home-based franchise, for instance, will allow significant schedule flexibility but may blur the boundaries between your work and personal lives. A brick-and-mortar franchise, on the other hand, may require you to keep consistent work hours, but it creates greater separation from your personal life.
If you plan to be an owner-operator, rather than an executive owner, you should also consider a franchise’s typical business hours. Medical transportation franchises may require on-call hours, for instance, and some fast-food franchisors may require you to keep your restaurant open until 1 or 2am. If you are looking for a predictable lifestyle where work is confined to traditional business hours, those kinds of franchises aren’t for you.
Will this franchise help me achieve my goals?
People go into franchising for all kinds of reasons. Our candidates most often want flexible schedules, less time spent working, and financial independence. But some are more concerned about legacy, career autonomy, the opportunity to expand their professional skills, or a desire to plug into their communities.
Different franchises will vary in their suitability for these goals. For instance, if building wealth is your primary goal, a multi-unit franchise will get you there faster than a single-unit franchise will. Or if you’ve been working for a faceless corporation and want a closer connection between your work and your local community, you might want to choose a regional franchisor over a national brand.
How much will I have to learn to be successful?
Regardless of your background, your new franchise will come with a learning curve. Even experienced franchise owners have to learn something when they open a new location or sign on with a new brand. Before you evaluate franchises, decide how much learning you want to do. Are you game for a completely unfamiliar challenge, or do you want something that connects closely with your prior experience? There’s no right or wrong answer to this question–it’s just a matter of personal preference.
Franchisees with limited business experience are the most likely to encounter steep learning curves. But even if you’re an experienced executive, you might need significant training to tackle a business in a new industry. For instance, if you’ve previously worked for B2B service companies, a commercial cleaning franchise will have some commonalities with your experience. But a fast-food or consumer retail franchise will be drastically different.
What’s the competitive landscape?
As you investigate specific franchises, don’t just focus on that company. Look at the overall landscape. Is the business in a crowded industry? If so, does it have a clear, compelling, and unique value proposition to help it stand out? If the market as a whole is not crowded, what about the geographic territory you’re considering? Remember: even franchises from the same brand may become competitors if they’re located too close to each other.
Also consider product-market fit. If it’s bad, other brands with a slightly different approach will easily out-compete you. For instance, a high-end salon franchise may struggle in a mid-market shopping district, especially if a discount haircut chain is nearby. Finally, look at the franchisor’s marketing program. Is it effective? If not, you’ll need to have the expertise (and budget) to create your own marketing program. Otherwise, competitors with better marketing will monopolize awareness and sales.
Do I feel good about the business system?
The franchise business system is a key perk of choosing franchise ownership over traditional entrepreneurship. A good business system means that the franchisor has already done the work to optimize product-market fit, operational processes, and more. But you should never assume that a franchisor’s business system is good just because it’s available for purchase.
As part of evaluating franchises, you’ll receive a Franchise Disclosure Document from each franchisor you’re considering. This document will be key to determining the strength of the business system. Make sure you examine it closely for red flags. Also look for signs of health, like a long history in business, steady growth, and limited franchisee turnover.
These five questions are fairly general and will help you evaluate pretty much any franchise. If you’re specifically considering executive franchises, we have suggested questions for evaluating those. In the meantime, if you’d like to talk to an expert about how to find the right franchise fit, book some time with me or my co-consultant Lauri today so we can help you take the first step toward your goals!
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