For the most part, the candidates we work with at The Empowered Franchisee are ready and eager to buy a franchise. They know they want the freedom, flexibility, and wealth-building opportunities franchise ownership provides. Usually, they approach us because they want to obtain those opportunities as quickly as possible. They know that working with a consultant will make the process more efficient. However, they also understand that we can’t wave a magic wand and make everything happen overnight (or for free). They know they’ll still need to invest significant time and money in finding the right franchise for their situation.
Every now and then, however, we encounter a candidate who isn’t truly ready. In these situations, my partner Mack or I will typically recommend that we press pause on the process. We do this because buying a franchise is highly competitive. Franchisors vet candidates just as much as candidates vet franchisors. A candidate who isn’t ready will make a poor impression and likely won’t get the franchisor’s approval. It’s much better to wait until you’re truly ready, so you can have the best chance of making the franchise match that’s best for you and your family.
So how can you maximize your chances of success? Take a moment to read through the list of red flags below, so you can catch yourself if you’re about to jump the gun.
You Have No Time to Spare
Although Lauri and I can make the franchise process more efficient for you, we can’t reduce the time commitment to nothing. Over the first 4-6 weeks, you’ll need to meet with one of us for a total of 3-4 hours to assess your goals, resources, and priorities and review your personalized list of franchise recommendations. Then comes due diligence: you’ll need to spend several hours completing your financial paperwork for the franchisor and reviewing the Franchise Disclosure Document they send you. During this time, you’ll also have weekly coaching calls, so Lauri or I can help you understand the paperwork and put your best foot forward. Finally, the franchisor will likely expect you to travel to their headquarters for a couple of days to do some interviews and meet with a selection committee.
If this sounds like more than you can manage right now, you’re not ready to buy a franchise–especially if you’re planning to operate one as a side hustle. And that’s OK. Sometimes the timing just isn’t right for a new venture. Maybe you’re launching a new division at work, or you’ve got young kids at home, aging parents who need extra help, or service obligations on a board or at your place of worship. Give those responsibilities their due and come back to see us when your schedule is lighter. We promise: the franchise industry will still be here.
You’re Not Fully Engaged
You may have the time to choose a franchise, but lack the motivation to engage fully with the process. If you’ve told yourself you’re “just testing the waters” or are “just curious” about franchise ownership, those are red flags. It’s OK if you’re not 100 percent sure that you want to buy a franchise. However, you should know that you’re ready for business ownership of some kind, and you should have a general idea that franchising is a likely fit. You must be ready to be transparent with us and the franchisor and to get into the weeds when it comes to assessing your finances, skills, and goals.
After all, how you engage with the selection process demonstrates how you’ll engage with your business. Franchisors are looking for people who will be dependable, motivated business partners. If you give half-hearted or cagey answers to questions, don’t show up for scheduled meetings, or demonstrate indifference toward the selection process, those are signs that you won’t bring value to their network.
Your Finances Are Not in Order
To buy a franchise and make the business successful, you need to keep a tidy financial house on two fronts: personal and business. If you’re deeply in debt, have personal bankruptcy or foreclosure in your recent past, or have minimal savings (regardless of your income), you’re probably not ready to buy a franchise. As a new franchisee, you won’t be able to pay yourself a salary from your business right away, so you’ll need savings or some other way to pay your bills until your business is profitable. Without that cushion, franchisors know you’ll be more likely to throw in the towel if you go through a lean period with your business–but they need franchisees who can persevere through lean periods and turn them into success.
On the business side, you must have a way to pay your up-front franchise fees and other startup costs. Franchisors will also want to see that you have financial runway: enough cash available to cover operating costs until your business’s revenue can do that for you. You don’t need to have all this money in cash savings before you contact us. But you do need to be in the right financial shape to take advantage of one of the many funding options available for new franchisees. That means having significant assets you can liquidate, or the kind of balance sheet that will appeal to a lender.
Your Spouse Is Not on Board
If you’re married, buying a franchise is not a solo decision. Full stop. Even if you have the kind of marriage where you and your spouse make life-altering decisions without consulting each other, franchisors won’t accept that kind of arrangement. They’ll expect your spouse to participate in interviews and accompany you on your visit to headquarters. They do this because they know that a spouse’s support is crucial to successful entrepreneurship, and that a franchisee with an unsupportive spouse is more likely to quit the venture prematurely.
From my own experience, I know they’re right. I would not have gained professional success – in either my first career or as a franchisee – without the incredible support of my wife Lauri. During my career as a corporate executive, she kept our household running smoothly as we moved around the globe, and she has always been my biggest ambassador and sounding board. Now, she’s a key partner in my consulting business. So if you’re married, don’t call the Empowered Franchisee until you’ve talked to your spouse. Lauri and I will want to meet with both of you, answer both your questions, and hear both your perspectives.
Now that you’ve learned the warning signs, do you see any in your own life? If so, don’t get discouraged. It’s not the end of the road. Take some time to resolve the issue, then come back to us. You’ll be better equipped to put yourself forward in a good light. Don’t see any of these red flags in your situation? Perfect–let’s talk! Book some time with me or Lauri today to get started on your exciting and fulfilling journey to franchise ownership and professional and financial freedom.
One response
Love it David! The four red flags are are extremely important to assess early on the mutual process. You did a great job in spelling them out and even reminding me to be more firm with my candidates as well. Thank you! 😊
Judy