Finding the Most Compatible Franchise and Make the Right Choice.

Congratulations, you’ve decided to buy a franchise. Now what will you do after coming to that decision? One of the first things that you will need is patience. Finding the right franchise is a job on its own. You will more than likely feel overwhelmed with all of the options and question which franchises are truly your best fit. Not all franchises are created equal. The truth is that some are better than others. Your future depends on finding a franchise that offers a great business system, products and/or services, support, branding and marketing. Here are the steps that you will need to take.

Consult a Franchise Professional

Consulting with a FranchiseOfficer Professional is absolutely risk free and one of the best decisions that you can make. There is never any obligation, pressure or selling and your professional will always provide you with valuable guidance and advice. Even if you do not find a franchise from our portfolio, your professional will still advise you on other franchises that you should consider.

Define What You’re Looking For in a Franchise

Your FranchiseOfficer Professional has the expertise that you will need in order to properly investigate franchise opportunities and ultimately make a sound choice. At FranchiseOfficer, we understand you have expectations, goals, and interests that need to be paired with the right franchise. Your professional will develop a unique confidential profile on your behalf. Your profile, EDGE & FIT evaluations and the discussions that take place between you and your professional will be the blueprint for finding your most compatible franchise.

Arrange Your Financing

Knowing your financial limitations is an important part of the franchise research phase. It doesn’t make a lot of sense to consider franchises that you cannot afford or that would leave you highly leveraged. The whole purpose of deciding to buy a franchise is to succeed and make money. We recommend that you invest a maximum of 75% of your net worth. Once you have figured out your investment comfort level, the next step is to figure out how you will finance your new franchise.

There are many options available for financing a new franchise business. You may already have the financing in place and that’s one less step that you will have to take. However, many people who are considering a franchise purchase may need to resort to other means of financing such as investment rollover plans, home equity loans, lines of credit, SBA and SBL loans and equipment leasing just to name a few common forms of franchise financing. The good news is that through Franchise Financiers a subsidiary company of FranchiseOfficer, we can offer you every form of financing available at the best rates and terms, of course subject to approval. If we can’t offer financing to a client, chances are that no other lending sources will be able to offer financing either.

Learn More About the Franchises That Your Professional has Suggested

Based on your unique profile, your FranchiseOfficer Professional will thoroughly evaluate our prescreened portfolio of franchise opportunities. He or she will assign a select number of franchises that meet your criteria of a perfect business. Often a client may receive one or more franchise recommendations that do not initially appeal to their particular criteria. However, once you discuss the franchise with your professional, you will quickly realize that it’s a perfect match. There is a true science behind our franchise recommendations.

You and your professional will evaluate together and openly discuss the franchises that have been recommended to you. It is important to ask questions and learn why your professional has made certain franchise suggestions. Your professional will also provide some preliminary information and facts for you to review on each recommended franchise.

Narrow Down Your Franchise Choices

By eliminating the franchises that do not peak your interests, you are moving one step closer to possibly finding the right franchise. This is a good thing. Once this process has taken place, you are now in a position to learn a great deal more about the franchise(s) that intrigue you.

Receive and Review Further Information on Your Chosen Franchises

Your professional will then arrange an introduction between yourself and the chosen franchise company(s) so that you can receive additional information. The most important document that you will receive will be the franchisor’s UFOC (Uniform Franchise Offering Circular) also known as the Offering Circular or Disclosure Document. This document will provide you with specific information about the franchisor and the franchise opportunity. The UFOC will cover many important facets such as:

	The franchisor’s history and backgrounds of its officers and directors
	A full description of the franchise opportunity including the investment breakdown
	All costs and fees involved
	The obligations of both the franchisor and the franchisee
	The franchisor’s litigation history
	A list of franchisees
	A list and description of franchise failures, transfers, franchise agreement terminations
	The franchisor’s financial solvency, including 3 years of audited financial statements
	The Franchise Agreement and other agreements if involved with franchise purchase

At this point no one expects you to make a quick decision, this is just the beginning of your due-diligence. There will still be many things that you will need to consider and evaluate. During this phase, your professional will always be there to assist you with any questions about buying a franchise.

Building Rapport With the Franchisor While Continuing Your Investigation.

One of the first things that you will need to understand is that you are not the only one performing an evaluation. The franchisor is also evaluating you. It is standard practice for a franchisor to require prospective franchise owners to complete a franchise application in one form or another. A good franchisor will do everything it can to protect its brand and existing franchisees from undesirable franchise candidates. Good franchisors do not sell franchises, they award them. Having the necessary capitalization is only 50% of the qualifying factor. The franchisor will evaluate your franchise application and study your demeanor and conduct very closely. It is important for you to show a serious interest and be professional at all times.

While showing the franchisor your qualifications, they should be showing you theirs as well. During your evaluation, remember to ask many questions. Franchisors are used to being asked questions and they expect that from you. A reputable franchisor will respect you for it and it also shows that you’re seriously interested.

Speak with Existing Franchisees

The best resource you will have during your due-diligence phase will be existing franchisees. The documents that you will receive from the franchisor will definitely describe the franchise opportunity and all that’s involved. However, what’s most important is that you speak with franchisees who have been down the same path that you’re considering. In order to really gain insight into a franchise system, you will need to speak with a number of Franchisees to gain a solid understanding of what it’s like to own that particular franchise. Within the UFOC, you will find a list of the franchisor’s franchisees.

Here are some of the important topics that you should cover when speaking with existing franchisees:

Training: What’s the training like? Ask existing franchisees about the initial training. How did they feel after training was complete? Did they feel well prepared? Were there still questions that were left unanswered for the franchisee? How many people attended training? Was it a large class or a one on one setting? Was the instructor knowledgeable and patient?

Franchise Support: What sort of support does the franchisor provide? You have probably read about the support offered within the franchisor’s documents and promotional materials. However, it is important for you to know that the support is as good as the franchisor says it is. The only way to find out is by asking existing franchisees who depend on it.

Franchisee/Franchisor Relations: Do existing franchisees feel that they have a good relationship with the franchisor? If not, try to find out why they don’t have a good relationship with the franchisor.

Similarities with Franchisees: One of the most important things that you can do while speaking with existing franchisees is to find out what you have in common with them. If you find that you have a lot in common with the successful franchisees, that’s a good sign that you’ll be successful too. 

Earnings: What does a typical franchise unit make? Try to find out what the average franchise unit yields in the way of gross and net earnings. Always be polite when inquiring about this information, some franchisees may consider it confidential. However, others might be more open to disclosing their sales performance. The best time to ask about earnings is towards the end of your conversation so that there is a level of comfort established.

When surveying existing franchisees, you must keep in mind that some franchisees may not be 100% satisfied. As it is said, “You can’t please everyone”. As a good rule of thumb, 70% or more of the franchisees that you speak with should be satisfied with their franchise and franchisor. Anything less than 70% should be a red flag. You should also understand that sometimes a franchisee’s discontent has nothing to do with the franchise or franchisor but rather their abilities to successfully run a business. You need to be able to tell the difference.

The above questions are just a few of the items that you should inquire about when speaking with a franchisee. Upon request, your FranchiseOfficer Professional will provide you with our Franchise Due-Diligence Kit. Within our Due-Diligence Kit, you will find hundreds of questions that our own experts would ask.

Consult with an Attorney. Not Just any Attorney Either. A Franchise Attorney.

The decision of buying a franchise is a serious one. Every prospective franchise owner should seek the advice of a competent franchise attorney. Your attorney will help you make sense of the franchise agreement that is often written by attorneys for attorneys and in favor of the franchisor.

Most good franchisors do not negotiate their franchise agreements. However, some smaller, less fundamental clauses may be negotiable.

These are the reasons most franchisors do not negotiate their franchise agreements:

Fairness: No franchisee should get a better deal than another. Should a franchisor offer better deals to certain franchisees, it would be unfair to other franchisees who didn’t receive such favorable terms. Additionally, as a result, it may expose the franchisor to future discrimination claims.

Legal Requirements: Franchisors must comply with the rules outlined by the FTC and those of specific states/provinces. A franchisor is required to disclose special concessions or terms they have negotiated with specific parties. This requirement is designed to inform prospective franchisees through full disclosure. However, it is difficult and costly for a franchisor to manage when every franchisee has a different deal. It creates administrative disorder when franchisees have different agreements. For example, whenever the franchisor wishes to make changes or when a franchisee requires assistance, it would require the franchisor to examine the many different agreements just to ensure that the franchisor is in compliance.

History of Success: Excellent franchisors will not negotiate their franchise agreements if they have a track record of successful franchise operations and happy franchisees. They would not change something that works.

Demand: A successful franchisor will have a steady flow of serious prospective franchisees who will accept the terms within the franchise agreement as they are stated. If you were in the same position, would you be inclined to make concessions to your franchise agreement?

You definitely need to know your rights as a franchise owner, but will typically need to accept the franchise agreement as it is written. It all comes down to how much you like the franchises and whether or not you can live with the terms of the agreement. If you cannot live with the terms, simply move on to the next preferred franchise opportunity.

*As a FranchiseOfficer client you will be able to benefit from our strong supplier relationships. Should you wish to have an attorney review a franchisor’s materials, we can direct you to one of our recommended franchise attorneys. For between $395 and $695, one of our recommended franchise attorneys will perform a complete franchise review for you. These are substantially discounted rates since most attorneys will bill $1,500 - $2,500 per franchise review. We’ve been able to negotiate the lowest rates possible for you. Best of all, if you decide to purchase a franchise from our portfolio, we’ll reimburse the cost of the franchise review.

Discovery Day, Meeting the Franchisor

Meeting the franchisor is generally the last step in the due-diligence process for both you and the franchisor. This stage is often referred to as “Discovery Day”. Discovery Day is typically held at the franchisor’s head office. On this day, you will have the opportunity to meet the franchisor and its key personnel. The purpose of Discovery Day is to allow you and the franchisor to become better acquainted. We also recommend that you spend time with the people that you will be involved with on an ongoing basis as a franchise owner. Some of the people that you should meet with are the franchisor’s operational, training and support personnel. You should be confident about their competence and feel good about the potential relationship you may have with them.

Discovery Day is the time to have any outstanding questions answered before you make a final decision.

FranchiseOfficer highly recommends that all prospective franchisees visit with the franchisor that they are seriously considering. It is far wiser to spend a few hundred dollars on a trip to meet the franchisor, than to make the wrong choice and spend thousands. It also shows that you have good intentions with the franchisor.

It’s Time to Come to a Decision

At this point you’ve probably spent approximately two to six weeks evaluating all aspects of the franchise opportunity and the franchisor. By now, you should have all the information you need and no questions should be unanswered.

It is time to make a decision and move forward in one direction or another. As with everything that we consider buying, we must eventually decide whether or not we wish to purchase it. Buying a franchise is no different. Two to six weeks is typically ample time in order for you to make a prudent final decision. As with most important decisions you may go through a variety of emotions. Providing that you have taken the appropriate steps, your decision will be an informed one. Whatever your decision may be, your FranchiseOfficer Professional will still be there to help you even it means looking at other franchises outside our portfolio. If you seriously want to own a business, we are confident that with our expert assistance you will find the right franchise and be well on your way to achieving your dreams.

To begin the franchise process, please register your contact information through FranSECURE.com, our online client resource center. A FranchiseOfficer Professional will be in touch with you within 24 hours. Are you ready? Click Here to get started!!

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