Let’s say you are looking to start a franchise, but you aren’t sure what kind of franchise to choose. You hope to find the right one, but how do you really know? Today I am going to help you answer that question. You will have to start with research, research, research. This research starts by building your own ideal business model, which I talk about in another video. What we’re going to talk about right now is the three stages of franchise research that you are going to want to go through.
Stage 1: The Franchisor Stage
Stage one is what we call the franchisor stage. Sometimes I like to call it the insomnia stage, because you’re going to get bombarded with information. You want to know from the franchisor’s perspective, what is their value proposition? What makes their system so good that it’s going to enable you to run their business well? What are their systems and processes, their coaching, their support, their training? What is the value you’re getting for your franchise fee? What is the business model? And from their perspective, what is the role of the owner? Meaning, that if you buy the franchise, what is the role they expect you to fulfill? They are going to tell you a great and wonderful story, and you’re going to get excited by that. You might even get a little bit scared- that’s normal.
Stage 2: Validation
Once you understand the value proposition, you’re going into the second stage, which is the validation with existing franchisees; this is the most important stage because it’s the franchisees who are going to tell you what it’s really like, how well the system is working, where it’s working well, where the support is strong, where it might be a little soft, and more importantly, from their perspective, what is the work that drives success? Is it similar to what you hear from the franchisor?
They’re also going to be the ones that are going to give you the understanding of what the earning potential is in the business, and most importantly, what is the work it takes to achieve that? Because what you’re going to find out is what you’ve got to do, and how much you’ve got to do that in order to achieve your goals. Once you’ve done this work, now you’re narrowing it down to the right franchise.
Stage 3: Confirmation
Now you’re ready to go to the third stage, which we call confirmation or discovery. You’re not really discovering anything new, so now you’re going to the franchise lawyer to get your franchise agreements reviewed; to incorporate, and do all those final steps. You want to seek professional help: CPA for a business plan, other lending support, who is your lender, etc. This will take you to the stage of being ready to buy the business.
As you go through all of these stages, this is the work that we guide you through folks, because there are so many different things that you have to do. We make sure you don’t skip steps. We shine the light in the dark corners of the room that you’re not looking at, so you can make an informed and defensible YES or NO decision. I would love to be able to guide you through this process. It starts with a conversation. Book a call today.
