When reading “How to Research a Franchise”, I learned that after you identify what brand you’re curious about, you need to first request and read the Franchise Disclosure Document. Each franchisor is legally required to provide this to prospects. If Jeff Elgin, CEO of franchise consulting from FranChoice, was a prospect he would ask a franchisor these 3 questions: “What’s your number-one focus?, Why do franchisees get in trouble?, and How are conflicts resolved?” You want to make sure that your franchisor has a strong focus towards his franchisees. You also want to make sure that they have a strong knowledge about their franchise and they know how to be successful.
Also when you are studying for a franchise, you want to watch out for red flags. You want to watch out for potential problems and weak managerial skills to outright scams when you are looking talking to a franchisor. “You also want to look at the resume of the franchisor’s top management,” says Joe Mathews, co-author of Street Smart Franchising and co-founder and principal of the Franchise Performance. Another warning sign is if a franchisor is overly excited about signing you up without hearing a lot about your qualifications. This a sign that the franchisor is in need of serious help with his/her franchise.
Finally, you want to ask the other franchisees question. According to Jeff Elgin, you want to ask, “How well prepared were you when you opened?, How effectively do the marketing programs bring customers to you?, and What is the financial reality?”. You want to make sure you are completely ready for every possible situation to be thrown at you when you start your franchisee career.
In the video you need to know the four main questions that are asked.
1. What are the benefits in owning a franchise?
2. How do you choose a franchise?
3. How much money is a franchise?
4. How much money can you make?
When becoming a franchisee you have definitely have your pros and cons. You can either be very successful or you can fail. Some cons are you get to operate business with a lot of help and you can use tested marketing programs. The cons not knowing the information you need to know about being a franchisee. They are a lot of money and their are a lot of restrictions. You need to do a lot of research and decide what you are good and what you are most likely to fail out. One thing you will always want to do is read the disclosure document. This is a very important document and you need to know everything about it and what is inside it. This document will explain all of the rules and regulations you will need to know when you are running your franchise. It will also tell you every bit of information you need to know to go out on top while running your franchise.