The Process
Anyone can buy a franchise, but buying the right franchise is what it’s all about. With over 3000 franchise concepts, the task of defining what is good and what is not good, can be overwhelming. This path of franchise ownership will change your life and it’s important to make the right decisions along the way.
Like a great franchise, and not all are great, there are systems for you to follow to become successful. A logical process to identify the right fit for you is paramount for your future.
While working together, we’ll go through a series of steps to determine how and what is the right franchise for you.
Step #1 - Build your “Model”
The discovery process has many paths you could follow but most are incorrect. Just because something attracts your attention does not mean it is right for you, i.e. “just because you ate a good Subway sandwich doesn’t mean you should buy a Subway franchise.” Before you start researching the franchise’s website or contacting the franchisor, it is essential that you determine what your Model looks like. So, what exactly does ‘building your Model’ mean?
It will be the foundation for determining where you would be most successful and what would be in alignment with your abilities, financial resources, lifestyle goals, and location preferences. In other words, before looking at any franchises, you need to first determine what will the characteristics of your ideal franchise.
Let’s break this down:
Part 1 – Completion of a confidential survey.
The survey is designed to identify basic information regarding your current situation and give you and I key points to discuss, such as challenges that might need to be overcome. This is the first “door we open” to determine whether franchising could be right for you. If franchising is not right for you, I will share this with you immediately.
Part 2 – Conduct a consultation.
Consultations are usually between 60 to 90 minutes and can happen both in person or over the phone. Working with people all over the country, the majority of consultations are conducted over the phone. Properly done the consultation will allow us to systematically identify what is important to you for this decision. The information that you share will be formalized in a Model that I will create for you. This is a personalized document that outlines your Model and can be actively used to measure ideas.
Step #2 - Pinpoint Franchisors
Now we focus on the franchise systems that could potentially allow you to achieve your objectives. With over 3000 franchise concepts, paring down options of well-screened ideas, is critical. No one has the time to properly investigate hundreds of franchises. With my affiliation with FranChoice they have already completed the “heavy lifting” by doing the research for you. FranChoice has already vetted thousands of franchise systems and know which are worth your effort to investigate further.
I will identify multiple franchise companies that are worth your time to validate. All the franchises that I introduce to you will have the following characteristics:
- The Franchisor will have proven measurable operating systems.
Some systems have been around longer than others but I always focus on companies where you can prove out the success of the model. - The Franchisor will have territories available.
I will confirm territory availability for each of the concepts, before introducing them to you. - The Franchisor opportunity will meet your criteria.
From the survey and consultation, we’ll create the model. This model will determine which concepts will be recommended. - The Franchisor will have happy franchisees.
Of course, nobody is happy all the time but, on average, the franchisors that I introduce to you will have a positive, supportive franchisee community.
Even though I will introduce you to franchises that match your criteria, you must also fit the franchisor’s criteria. Every proven franchise system has an internal list of characteristics that their most successful franchisees demonstrate. This process needs to fit both you and the franchisor.
My goal is to find franchise systems that fit you so that you can begin your research focused on viable opportunities.
Step #3 - Due Diligence & Discovery
Research of the targeted franchise systems will have a franchise learning process designed to educate you regarding their concept. As a two-way street of “a mutual elimination process”, it is important that you follow their system. It’s like a test to determine if you can be a team player. At the same time, it is critical you know what you are doing and make sure you cover all your bases. That is where I can help. …
Diligence is broken into three parts:
Part 1 – Franchisor & Foundational Principles
You will have a series of calls with the franchisor in order to learn the foundational principles of the franchise system. Each call with the franchise representative will cover a different topic. Topics may include marketing, operations, labor, real estate and the FDD. These calls will educate you regarding the quality of the franchise infrastructure and systems. I will provide you with a series of questions to use when speaking with them.
Part 2 – Validation Calls
Multiple calls with franchisees will become the next focus which I refer to as validation calls. Once the franchisor gives you permission, you will be speaking with and interviewing franchisees, asking them any question you want. Although they are not required to speak with you (but when they do), you will find them to be exceptionally open and honest. This is also the part where you will build the complete financial model of the business when speaking with the franchisee. I will provide you with a series of questions you can ask the franchisees regarding the business and financials.
Part 3 – Meet the Team / Discovery Day
Meeting the franchisor and the staff that will be supporting you is the final part and the last piece of the due diligence process. We call this Discovery/Meet the team Day. This is the part of the process where you are able to meet the franchisor face to face and determine if there is a potential for a long term, trust-based relationship. The majority of franchisors schedule these days once a month for all candidates. It is very important for everyone to meet each other in person.
Final Note – I will be there for you during this entire process. Every week, more so if needed, we will speak. Our calls will consist of; 1) reviewing what has been accomplished, 2) answering questions, and 3) providing specific coaching and guidance regarding the next steps. You should not be surprised or unprepared during the due diligence process. There is a system to investigating a franchise and, if followed, you will know everything you need to know before making any decisions or commitments.
Step #4 - Decision & Next Step
The last step is to make a decision, which certainly is the most difficult part of the process. After Discovery Day, both parties generally spend a day to gather their thoughts. In most cases, the franchisor will contact the prospective franchisee and inform him or her whether they wish to offer a franchise. Should the offer be made, the prospective franchisee would then inform the franchisor whether he or she wishes to accept the offer. In theory this appears to be easy, but in reality, it is the hardest part.
You have spent nearly four to six weeks in this process conducting the due diligence. This is all about ‘doing’ a list of things to accomplish. When it comes to making a decision, choosing to vote on ourselves is much harder. It usually involves that voice in your head that says – ‘I know I can do this’ and ‘I believe in myself’.
I cannot make the decision for you – nor should I. All I can do is provide you with a thoughtful sounding board and well-reasoned decision-making approach. This is the time when most people feel the most fear. This topic is of utmost importance which we will discuss at length may times during this process and have many “gut checks.” The most important thing to realize is that uncertainty of decision making is temporary. Once you make a decision, everything will once again become clear and you will once again move into a ‘doing’ mode.
IMPORTANT NOTE:
As the diligence process has come to an end, I hope to stay in touch as your business grows. You are going to have good days and you will have some challenging days. I am and will remain here for you. There is nothing more that I want than your success and if I can provide advice, guidance or coaching as you build your business, I am honored and excited to do so.
