As a prospective franchisee, you understand that carrying out the proper due diligence is critical to your future success. That’s why you’ve conducted thorough research on the franchise brands and opportunities you believe will help you realize the dream of operating your own business. Through this research, you’ve pinpointed the opportunity that resonates with you best, and have been in contact with the head office team to learn more. With both parties enthusiastic and engaged, it’s time to take the due diligence process to the next level.
They say a franchise agreement is like a marriage, with two different sides coming together to create something of value for all involved. This makes it vitally important for you, as a prospective franchisee, to meet with the key people you’ll work with if you enter into this franchise relationship. Just as you’re evaluating the company, they’ll also be gauging your fit within the system’s culture to help ensure a good match. The best way to accomplish this is by meeting face to face with the franchise support team at their head office, as part of the franchise discovery day.
Here are five tips to help you prepare for this pivotal meeting with the franchise team, so you can put your best franchising foot forward.
- Do your homework. While the franchisor will expect you to have questions about the brand and opportunity, they’ll also want to see that you’ve already done your own research prior to meeting in person. Bring along any documentation of your research, along with any notes you’ve made along the way. You should be ready to talk about your experience and qualifications, along with what you’ve already learned about the brand.
- Ask the right questions. Franchisors will be able to learn a lot about you and how well you’ve prepared based on the type of questions that you ask in the face-to-face meeting. Write down any questions you have as you conduct your research and bring them along. Posing thoughtful questions based on the investigations you’ve made shows the franchisor that you’re thorough, proactive, and committed to learning more about their system.
- Be enthusiastic. Successful franchisees are those who are passionate about their franchise brand and the product or service it provides. Be sure to showcase your knowledge and enthusiasm for the concept in your meeting. Don’t worry about whether you’re an expert yet, because you’ll receive operational training when the time comes. What can’t be trained is a genuine passion for the brand and excitement about providing a high-quality, consistent experience for the brand’s customers.
- Showcase your professionalism. Franchise systems are looking for franchisees who will act as ambassadors for the brand. This means they’ll be looking for professional candidates who look polished and can communicate clearly. Franchisors want to know that you’re organized, courteous, and would represent their brand well in the marketplace.
- Be proactive. Choosing to invest in a franchise is a decision that can’t be taken lightly. You can show the franchisor you’re interested and taking the process seriously by enlisting the help of franchise support professionals. In addition to providing you with the support, knowledge, and guidance you’ll need throughout the process, consulting with experts, like a franchise lawyer or accountant, will indicate to the franchise system that you’re a conscientious and serious candidate who is proactively seeking the support needed to make the most informed decision possible.
While each franchise system will have its own unique list of obligations, prerequisites, and requirements, you should always plan to bring along these intangibles, along with the information you’ve gathered as you conducted your due diligence, to all meetings with franchise systems.
Evaluating the franchise brand
Once you’ve met with the franchise support team at the brand’s head office, it’s time to take stock of what you’ve learned and make a final decision about whether you’d like to move forward with this opportunity. You’ll want to review your notes and everything you’ve learned throughout this process. Do you have all of the answers you need to move forward? If not, plan to follow up and ask any further questions so you can make the best possible decision.
As you evaluate your experience with the franchisor, here are some questions to consider:
- Do you have enough passion for this brand and its offering to act as a brand ambassador for the years to come?
- How do you feel about the people you met from the franchise support team? Are you comfortable working with these people, especially as you navigate any challenges?
- Does the culture of the system match your expectations? Does it fit with your own personality and unique requirements?
- Do you have any ‘gut’ feelings that are telling you this is the right opportunity for you? Are there any ‘red flags’ that are causing you to rethink any elements of this partnership?
Beyond your meeting with the franchise team, you should also have conversations with existing franchisees to get their take on being a part of the system. It’s important to ask them questions so you can learn about how their experience compares with what you’ve discussed with the franchisor. You should speak with several franchisees as part of this validation process and should include franchisees who are performing at different levels (i.e. speak with those who have lower sales, along with the top performers).
Before you sign the franchise agreement, you need to be 100 per cent ready to move forward with your franchise purchase. Take the full 14 days to review the agreement and all supporting materials, and don’t forget to enlist the help of your team of franchise support professionals.
The Importance of Franchise Due Diligence
Investing in a franchise is a major decision, and not every franchise will be right for every individual. This is why it’s essential for you to fully investigate the franchise systems in which you’re interested.
Part of the due diligence process will likely include meeting with representatives from franchise systems. Here are a few critical questions that you should be able to answer or have answered to your satisfaction about the franchise system as you research the brand and meet with key members of the head office team:
- What makes the franchisor’s product or service unique?
- How many years has the franchisor been operating? How many units do they have?
- How does the franchisor choose franchisees? How are qualifications reviewed?
- What kind of support, including initial and ongoing training and operational assistance, does the franchisor provide?
- Is the franchise system a member of the Canadian Franchise Association (CFA)?
Visit www.FranchiseCanada.Online for more resource articles to help you conduct the proper franchise due diligence. You can also find more information about CFA member franchises at www.LookforaFranchise.ca.