When choosing a franchise, it’s important to use the right research tools and process to find one that offers what you need to succeed. Taking the time up front to gather as much information as you can is sure to have a significant impact on the future success of any franchise venture. While the internet has made many parts of this process easier, there is no substitute for in-depth hands-on research.
A good place to start looking for information on franchise opportunities include online franchise portals, such as FranchiseDirect.com, FranchiseGator.com, or Franchise.org. The latter is sponsored by the International Franchise Association (IFA). On this website, you can find thousands of franchise opportunities that can be searched by geographical location, the amount of investment required, and several other criteria. The IFA also offers additional resources, such as a digital magazine for franchisees, informational reports, and much more.
For example, on Franchise.org, the IFA has created an extensive digital guide to finding, evaluating, and choosing a franchise. They also host an annual convention as well as participate in a number of conferences throughout the year, where franchises come together to exhibit their opportunities. Attending a convention or conference is a valuable way to meet hundreds of franchise representatives in a short period of time, making your information-gathering process quick and efficient.
Trusted media sources are another place to look for information about franchise opportunities. Entrepreneur Magazine, Forbes, and others often publish high-quality articles about franchising. The Real Property Management franchise has been featured many times in such publications. For example, Forbes Magazine named Real Property Management one of the top ten franchises for investments under $150,000. Such endorsements can be a reliable indicator of a franchise’s potential for success.
Beyond internet research and conventions, one of the best ways to gather information about a franchise is to ask a lot of people a lot of questions. For example, call the franchisor’s sales or business development representative and ask about the history, success rates, franchisee support, and so on. Don’t accept vague or general answers like “we provide training.” How is the training delivered? Is it online or in-person? How many days of training are included? What does “on-going support” mean? A quality franchise can provide detailed answers to questions like these – and much more.
If they want to ask you a lot of questions, too, that is an excellent sign. A franchise organization should be just as interested in researching you as you are in researching them. The best franchise organizations don’t sell to just anybody; they award their franchises to recruits who can demonstrate a lot of potential.
When calling franchise organizations, it’s important to speak to multiple different franchise representatives in the same industry and take careful notes. In this way, you can create a side-by-side comparison of franchise opportunities to determine which may be right for you. You may want to find out if the franchise has earned any awards or recognition, and whether full-time subject matter experts will be available to assist you. While such questions may not seem important, consider the difference it makes. Real Property Management franchisees have access to full-time dedicated property management experts, accounting specialists, marketing professionals, and business coaches No other property management firm in the business provides this level of support. But unless you ask the right questions, clear advantages like this may not be obvious.
Once you have a good idea of which kind of franchise opportunity you want, ask for a Franchise Disclosure Document (FDD) from each one. The FDD is a legal document required by every state. It includes a full disclosure of the history of the franchise, financial information about the franchisor, the number of franchises currently operational and their location, any litigation at the franchisor level, an example of the agreement you would sign if you became a franchisee, and more.
This disclosure is of particular importance because the franchise organization has legal limitations about what they can and cannot say to you. But the FDD will include important clues about your potential for success with the organization. For example, Item 19 includes details about the performance of existing franchises, which can raise serious red flags about an organization that does not support franchisees well. Additionally, all franchise organizations are bound by the Federal Trade Commission rules, so any violations there should be taken into account.
More information about a particular franchise opportunity can be gathered by attending a Discovery Day presentation. These events typically take place at the franchise headquarters, and offer a chance to meet executives and other staff members in person. You may also find a series of informational presentations about franchise operations, training, marketing, competition, and industry-related issues. While you will probably pay your own travel expenses to attend Discovery Day, it is a valuable opportunity to get a first-hand look at who you will be partnering with as a franchisee.
A final but equally important part of the research process includes contacting existing franchise owners for their experience and advice. Talking to both new and well-established franchise operators can give you a better sense of the short- and long-term potential of a franchise. Ask good questions that cover topics like their professional background prior to owning a franchise, what they think are the strengths and weaknesses of the franchise organization, and whether or not they would make the same choice again. Just keep in mind that franchise owners are typically consumed with running their business, and so not all of your phone calls will be returned. But many are willing to pass along pieces of advice or hard-earned wisdom, so it’s worth the effort in the end.