Acquiring a franchise is like buying a car. You should always check under the hood before you sign for the loan.
Just as one make and model of a vehicle differs from another, the same can be said of franchises.
Here’s an essential four-point checklist for would-be franchisees:
- Do extensive digging. Read into the offer that’s on the table. Find out how the early franchisees were treated by the franchisor. Your research may turn up troubling issues. If so, those concerns should be addressed before you sign the franchise agreement. That will give you some insight into what type of relationship you can expect once the deal is sealed.
- Meet with a professional business coach. The success of your franchise in large part depends on your stamina and health. There will be long hours at first. Exhaustion can distort your thinking, so get plenty of sleep. Remember that your health is a precious resource.
- Run the numbers. Put on your sleuth hat and crunch the data. Then compare those numbers with your expectations. Make sure they match, or you may be in for a rough ride. It’s human nature to be expectantly hopeful, but leaning on wishful thinking will likely prove a serious pitfall. As of late November Fed officials expect to raise interest rates in 2015, so don’t sugar coat the general economic climate.
- Do an exhaustive self-evaluation. Are you ready to put in both capital and elbow grease? Franchising is an intensive commitment that requires many years to reach its full potential. That’s why you want to ensure a match made in heaven from the get-go.
If you’re juggling too many startup details, bring in a professional franchise analyst to help you. It’s worth it.
