I’m a big fan of sports analogies, particularly those that involve college football. In keeping with that theme, I would like to issue a challenge to any candidate looking to “be in business for yourself, but not by yourself.” When looking for a franchise business opportunity, you should act like a five star recruit.
Fact: High-quality franchisee candidates are in demand. A motivated, appropriately-capitalized candidate who is also well-suited to the franchise company’s business model and corporate culture is the franchising equivalent of the Holy Grail. Anyone who has attended a franchise expo or made an inquiry via an online franchise opportunity website should sense the virtual feeding frenzy that can occur. They WANT you!
Much like a talented high school football player who has earned the attention of multiple college recruiters, it can be easy to allow oneself to get caught up in the excitement and the sheer possibility of your options. And yet, it is a source of constant amazement to me that candidates so often bypass the due diligence process in favor of an effective (or at least flashy) sales pitch. This is roughly the equivalent of choosing your future team based upon the color of their uniforms, or how well you like their mascot. Sounds crazy? It happens all the time.
As a high-value recruit, you are not only in the driver’s seat, you absolutely owe it to yourself to understand how desirable you are. Yes, the initial franchise fee paid to the franchisor is a part of what makes you a coveted candidate, but the companies that truly understand franchising well know that your value really lies in a long, ongoing, mutually- beneficial relationship which also helps to build the brand. It also means receiving royalties from each franchisee for a decade or more. This is the equivalent of a team legacy which includes an ever-improving program which is happily (and generously) supported by alumni (especially players who make it to the pros).
A college football recruit puts a lot on the line: four or five years of their lives, time, energy, and assorted body parts. There is also opportunity cost; the choice of one team over another can also mean choosing a losing season over a winning one, time on the bench versus time on the field, or a team mired in scandal instead of public admiration. All of these are impossible to predict. Or are they?
You too will be putting a tremendous amount on the line when you invest in a franchise opportunity. Time, energy, and financial resources are a given. Hopefully no body parts will be involved. What is often overlooked is the commitment required of your significant other/family, your credit resources, your personal reputation, and your mental and emotional space. This is clearly beyond writing a check and going on auto-pilot. Opportunity cost is a factor here, as well, since you are entering into a serious contractual agreement. Choosing one franchise opportunity means (in most cases) foregoing others.
The recruiter may be charming, the coach may be convincing, the locker room may be impressive. It is your responsibility to look beyond all this, ask some tough questions, and make sure you get meaningful answers. What are the right questions? How do you know if the answers you get are valid? Read on.
Of course, the football recruit will be given the opportunity to talk with other players on the team, with an emphasis on those who have been successful. Likewise, as a franchisee candidate will be typically be encouraged to speak to carefully selected franchisees. All well and good, but don’t you also want to know about the experiences of the players who round out the roster; first string, bench warmers, freshmen, seniors, and everyone in between? Which would be a more helpful, a conversation in the coach’s presence, or one which is completely confidential? Would you get better information if you talked to every team member, or a small group?
Let’s be logical here. It’s hard to argue that you will get more accurate feedback when it is guaranteed to be confidential, as opposed to when there is an opportunity to garner favor from the coach, or a fear of retaliation. Also, the most basic premise of statistical validity is based upon a high response rate. Depending upon the size of the franchise system, it may or not be feasible to individually contact 70% or more of the franchisees. That is the value of a independent, third-party franchisee survey, IF it meets the comprehensive, confidential, high response rate criteria.
Now, what questions are the right ones? It’s tempting to go straight to “How much money will I make?” While important, you should also be asking questions like “What programs do you have that help me (the new franchisee) to be successful? “Franchisee satisfaction” has become an increasingly popular discussion topic in franchising, but I would contend that you want to go beyond the notion of “satisfaction” and look critically at specifics within the system that contribute to (or hinder) your future success.
Do the parents of a high-value football recruit ask recruiters, “Will my son be satisfied here?” One would hope that they would be looking deeper; at the quality of the strength and conditioning program, academic support, team culture and reputation…the things that contribute not just to success on the field, but also in life
You need to get answers to questions like, “How would you grade the initial training supplied by the franchisor?” (Fig. 1) and “How would you grade the initial opening support provided by the franchisor?” (Fig. 2) Getting the right start is crucial, and it won’t happen without effective training and support programs in place.
The ongoing relationship between franchisees and their franchisor is just as important as the initial phase, which means you need to know about issues such as the quality of ongoing training and support provided (Fig. 3) and the value of franchisor-sponsored advertising, marketing, and promotional programs (Fig. 4). Does the franchisor truly build their brand on a foundation of mutual success, or is it a “churn and burn” situation? You need clear, defined, valid answers to these and other equally tough questions. If you don’t like the answers you are getting, you need to be prepared to walk away; this is no time to make a decision based upon emotion.
Although it seems obvious, I also need to state for the record that (once you have made your decision and commit to your new “team”), you have some distinct responsibilities, as well. You are not signing on to be an independent entrepreneur who happens to have the right to sell or provide a particular product or service. You are now an integral part of a brand, and will be held to a standard accordingly. It is amazing how often this primary tenet of franchising is resisted. There is a team (brand) playbook, a culture, a support staff, a system; that is the very point of the franchise business model. You don’t get to join the team and disregard the system. THAT is why you need to make sure you know as much as possible BEFORE you join the team.
A franchise business can be the playing field where the Great American Dream is realized, or on which much is lost. Winning, losing, or falling somewhere in between…it all starts with the team you choose. Choose wisely.