Consulting Archives | Franchise Dictionary Magazine

2 07, 2019

Why Invest in a Franchise?

Audra2019-07-08T13:15:55-04:00July 2nd, 2019|Tags: familiar brand, flexible lifestyle balance, franchise business model, franchise training, franchisor support, proprietary technology|

Why Invest in a Franchise?

Here’s Nine Compelling Reasons

by Brian LaCour
Certified Franchise Consultant

When you’ve got the entrepreneurial itch, you might be weighing whether to go it alone or invest in a franchise. Here are nine arguments in favor of the second option.

1. You get off to a head start with the backing of a named brand. By purchasing a franchise, you’re often buying into a business with a brand that’s already been developed or emerging, marketed, and, most important, familiar to consumers.

2. You can choose the franchise that accommodates your lifestyle. Maybe you want to work from home or work only certain parts of the year. Perhaps you don’t want to manage employees. Investing in a franchise allows for this flexibility. Franchises are diverse, and many of them don’t require employees or office space. You can opt for a franchise that’s right for your interests and skills.

3. You receive customized training designed to get you up to speed with your business. In a mix of classroom and on-the-job training, the franchisor will teach how to operate the business as well as the techniques particular to the brand. The transfer of knowledge during training serves as the foundation of a successful franchise network and is not available to someone in business by himself.

4. You benefit from intellectual property, trademarks, and patents. Many franchisors grant you access to proprietary technology or software that’s designed specifically to their brand and gives franchisees an edge over their competitors.

5. You benefit from strategic partnerships and agreements. By joining a franchise network, you become part of a much larger, more powerful network than you could have on your own. This applies to everything from negotiating the purchase of advertising to making supply arrangements.

6. You increase your chances of success. Franchise ownership increase your chances of being in business five or 10 years later and being profitable.

7. You have a team protecting the integrity of the brand. Being part of a franchise network requires adhering to rules and regulations. The upside is that there are standards for quality control among all franchisees. In addition, a strong franchise network will ensure all the franchisees are operating at peak performance.

8. You follow a formula that has proved successful. One discouraging aspect of starting your own business is testing the products and/or services you’re trying to sell. Going out on your own requires a leap of faith. A franchise network has already found what works.

9. You’re not alone. Starting a business can be intimidating. It is a test of endurance as you navigate unfamiliar territory. With a franchise, your network is just a phone call, email, or text message away. A support team will assist you when you open and as you continue to grow your business.

Brian LaCour

Brian LaCour has more than 20 years of business leadership experience in driving fiscal results, strategic planning, saving costs, increasing revenue, streamlining processes, and developing top performing teams. LaCour’s passion for helping people led him to the role as president of the International Franchise Group. Call LaCour at 561-502-7283 or email him at blacour@internationalfranchisegroup.com. Visit www.internationalfranchisegroup.com.

2 06, 2019

Franchise Precheck

Audra2019-07-08T13:38:09-04:00June 2nd, 2019|Tags: comfortable investment level, inner motivation, owning a business|

Franchise Precheck

Here’s how you can simplify the process

by Diana Capirano

When contemplating my exit from corporate life several years ago, I began by investigating franchises online. I clicked various links in hopes of finding clear, succinct information. And OMG, I created a cyber frenzy! My phone and email were blowing up, and I couldn’t even remember what buttons I’d pushed. I had started my search indiscriminately, without taking the following crucial first steps.

Gut Check

Make sure your motives are legitimate and defined. How seriously have you thought about owning a business, or are you reacting to a bad day at work? This doesn’t mean you know exactly what you want, just that you don’t want to work for anyone else. ASK: If I found a business that met my needs, would I commit?

Speak with your spouse or partner even if he or she won’t be involved. Will your significant other support your goals? ASK: How important is that approval to my decision?

Stay open-minded to various categories of businesses even if you’re leaning toward a particular one. Few franchises
require that you have experience in a specific field and 98 percent of franchise owners invest in something outside their wheelhouse. ASK: Can I leave my comfort zone?

Face reality and fear of the unknown. This mainly has to do with your confidence level and inner motivation. ASK: What’s the worst that could happen? Weigh it against the best-case scenario. This requires a second gut check. ASK: Do I take ownership and accountability by relying on yourself, or do you tend to rely on others?

Financial Check

Determine your comfortable investment level. Spending money without a guarantee means risk, but franchising is the lowest-risk option statistically. There are many budget-friendly possibilities, or if your resources allow, you can adopt the go-big-or-go-home approach. Start-ups go from $10,000 to $4 million. ASK: What amount can I comfortably assume? What is feasible?

Figure out your net worth and know your liquidity. Some franchisors have stringent requirements; lower-investment franchises may have none. ASK: What are the best options with my financial profile? If you need funding, a credit score of 685 or higher is preferred, but there are options even with poor credit. ASK: What is my credit score? (Then pull a free credit report.)

Know your WHY

Focus on what’s driving you to business ownership. Be objective and remove emotion. ASK: What’s my present need and what’s my end goal? If you’re just burned out, your present need may be a vacation. If being an owner represents the best route to the end goal—better quality of life—take the vacation and then start your search.

Know your WHEN

Have you been thinking of business ownership but failed to make a solid plan? If you’ve vetted opportunities before, ASK: Why did I not move forward?

Timing is everything. Maybe you did not complete the checks above. Maybe you weren’t serious enough before or were just exploring. ASK: What’s different now? Am I ready now?

Know your HOW (and your WHO)

In doing research, brand websites, online articles, social media, other business owners, and books can help. But too much information can create confusion. ASK: Would I benefit from objective expert advice? Franchise consultants have access to many brands but are trained to assist you beyond the search. A skilled adviser will educate, research, present, coach, and provide resources.

Your consultant and franchisors will lay out a process. Be engaged and be honest. This is the first step to understanding whether you’ll make a good franchisee. Speak to any successful franchise owner and you’ll hear, “just follow the process.” From your initial encounters, franchisors will determine whether you can follow the system and whether this opportunity is right for you.

Diana Capirano, CFC, has an expansive career that includes corporate and franchise sales and development, marketing and operations, mergers and acquisitions, structuring and negotiations, and business ownership. As a highly respected consultant and mentor, Diana espouses a profound commitment to helping prospective business owners and investors understand and navigate the process of deciding on a franchise business. Contact Diana at 941-999-0095, email diana@focusfranchise.com, or visit http://www.focusfranchise.com.

2 05, 2019

It’s a Process

Audra2019-05-03T15:35:08-04:00May 2nd, 2019|Tags: following a winning formula, franchise system, franchising, investing in a franchise|

It’s a Process

Franchising is about following a winning formula

by Don Clayton
Certified Franchise Consultant

I recently had a conversation with a young woman interested in owning a franchise. She was excited, friendly, joyful, and asked great questions. But once I began explaining the next steps in franchising, the conversation took a turn.

She quickly informed me that she didn’t operate that way and we’d do things her way. To her, the process is just like buying a car. The salesman needs to bow to her requests. That makes sense, right? It does when you’re buying a car, but not when you’re investing in a franchise.

After I explained that there are standard operating procedures to follow, she responded by standing her ground. Needless to say, she’s now looking for her next W-2 job.

A business in a box
Investors do not buy a franchise the same way they purchase a car or any other product. Franchises are awarded, not sold. The woman in my example is a nonconforming individual, and this type of person goes against everything in franchising. A franchise is a business in a box. For the most part, all of the kinks, errors, trials, and models have been hashed out and neatly packaged together. If someone wants to reinvent years of trial and error, that person should do so, but not through the franchise system.

The people best-suited to own franchises are open-minded life learners who are adaptable and follow instructions. Highly successful franchisees let the system work while incorporating their unique personalities into the business to make it their own.

The benefits of franchising
Franchisees enjoy the rewards of countless hours (sometimes years) of blood, sweat, tears, trial, error, money, and other sacrifices that someone else endured in order to make this opportunity available. Investing in a franchise allows one to jump right in, learn, follow protocol, make money, and have fun.

Don Clayton has spent more than 15 years helping others achieve their dream of business ownership. Starting as a franchise consultant for FranServe in 2001, he quickly became a top producer. His passion for the business led Don to the position of VP of Talent Acquisition, where he is committed to recruiting successful candidates. Contact Don at don@franserve.com or 919-777-0178.

2 05, 2019

What to look for in a food franchise

Audra2019-05-03T15:40:38-04:00May 2nd, 2019|Tags: buisness model, food franchise, food products source, franchisor training and support, marketing and advertising strategies, potential restaurant location|

What to look for in a food franchise

by Geoff Batchelder
Certified Franchise Consultant

The food sector makes up about a third of all franchises – A HUGE percentage for a single sector! So it’s no wonder that when many people think of franchising, they think of food. In fact, my own introduction to the franchise world came about as I was looking at pizza franchises.

Like most people, I had no idea that franchises were available in so many other business sectors. The idea of owning a
restaurant sounds glamorous, maybe because of the TV image of the restaurant owner greeting dignitaries as they enter the
establishment and then sharing an after-dinner drink with them while receiving lavish praise. That sounds great but is pretty far from reality. The food industry has lower margins than most industries, depends on tight management of food spoilage and inventory loss, relies heavily on minimum-wage employees, requires more in terms of capital investment, and is just plain hard work.

So why would anyone want to enter this business? Simple: Every person on the planet needs to eat multiple times a
day. That is one seriously large potential customer base. If you’ve considered the downsides and still want to own a restaurant, here are some things to look for when evaluating franchises.

THE FOOD
Do you like the food? Would you be excited about serving it?

THE BRAND
Is the branding professional? Are there multiple marketing and advertising strategies in place?

THE SOURCE
Where are the food products sourced? Is there a commissary model where you buy from the franchisor? Do they use one of the large distribution companies? Can you source any products locally?

PROCESSES
Does the franchisor have well-developed processes? The operations manual should cover everything you need to know from the time you unlock the door in the morning until you turn off the lights at night. There should be a detailed food preparation manual and also a food handling/safety manual.

SITE LOCATION
How are potential sites identified? Has the franchisor developed demographic models to understand where their customers are? Do they assist you with finding and evaluating potential sites? Do they help with lease negotiation?

CONSTRUCTION
What about construction? There should be a detailed construction manual and maybe even contractors in place that have previously done store build-outs for other franchisees. You can waste a lot of time and money if you’re left on your own to secure a site and get the store built.

TRAINING
What training and ongoing support are available? The food sector typically requires longer training and more support than other franchise sectors. Will you receive on-site training and support? Will you get assistance in hiring your staff? What are the plans to deal with changing trends and customer tastes? This is a sector that will also see more changes in terms of what customers want.

GeoffBatchelder Geoff Batchelder has been a franchise consultant and franchise development expert for the last 10 years after spending 25 years focusing on business development in the high-tech industry. Contact him at 1-877-222-3722 or geoff@compassfranchisegroup.com, or visit www.compassfranchisegroup.com.

2 04, 2019

Why buy? Weigh everything in the franchise package

Audra2019-04-03T15:52:51-04:00April 2nd, 2019|Tags: franchise advantages, franchise systems, franchise training, franchisee support systems, market development, potential franchise buyer|

Why buy? Weigh everything in the franchise package

by Geoff Batchelder

Should I purchase a franchise or go it alone with a business? This is a question every potential franchisee should think long and hard about—along with the franchises being considered—before deciding whether to buy.

Most of the potential franchise buyers I speak with think the answer is name recognition. While that’s something to be aware of, it’s not the most important benefit that a franchise can provide. Systems, training, support, and market development will often have a much bigger impact on your potential success than name recognition.

First, let’s talk about systems. Look for operational efficiencies that can speed your time to market, saving you money along the way and starting the flow of revenue in a time frame that you could not attain all by yourself. This benefit alone can offset the franchise fee.

Is there a “project launch” road map of steps to follow from the day you sign the franchise agreement to the day you hang out the open-for-business sign? This can be a huge benefit in helping you avoid costly, time-consuming mistakes.

Are there vendor arrangements in place? Often, the pricing received through a franchise offers a discount you could not get on your own.For instance, The Flying Locksmiths and WaveMAX Laundry have major purchasing discounts in place and pass the entire discounts through to the franchisee. Having these arrangements in place, rather than needing to line up your own suppliers, can be a huge time savings
even without a discount. How about service offerings that will benefit your customers? A call center to handle inbound calls and scheduling is a huge benefit for your customers and something you can’t provide on your own.

As for training, make sure you understand the topics to be covered. Assess the training. Once it’s completed, are you confident that you’ll possess the knowledge you need to be successful or on your way to success? Do different subject-matter experts deliver various parts of the training? Do you receive both classroom and on-the-job training?

Support may be even more important than training. Be sure to ask existing franchisees about support. After training ends, are the franchisees left on their own, or is there a steady stream of ongoing support and mentoring? Granted, different business models will require varied levels of support, so it’s not always an apples-to-apples comparison, but make sure the franchisees feel that they’re provided with all the support they need to continue growing their businesses and that any problems are dealt with on a timely basis.

quote

Finally, consider market development. How will you grow your business and beat the competition in your area? National advertising programs are not always the answer, and for many businesses, they don’t make sense. The business may be built on local networking and relationship-building. Maybe market development is accomplished through local advertising that’s targeted to specific demographics. Does the franchisor have any metrics in place to show what works? How do the existing franchisees feel about the market development programs?

If the franchise you are evaluating doesn’t have these benefits in place, you may want to check into alternatives.

GeoffBatchelder Geoff Batchelder has been a franchise consultant and franchise development expert for the last 10 years after spending 25 years focusing on business development in the high-tech industry. Contact him at 1-877-222-3722 or geoff@compassfranchisegroup.com, or visit www.compassfranchisegroup.com.

11 03, 2019

Q&A: Jessica Melendez on vetting franchisors

Audra2019-03-12T10:55:11-04:00March 11th, 2019|Tags: Discovery Day, expenses associated with launcing and running the franchise, franchise history, franchisor training program, Potential Earnings, protected territory, validation calls, vetting franchisors|

Q & A

Jessica Melendez on vetting franchisors

What are some important questions for a candidate to ask a franchisor?

Working as a broker, I put together a template of questions for my candidates to use when talking to franchisors. During the discovery process, most of those questions are answered, and my clients can check them off their lists. However, I insist that they get clear, in-depth answers on the following questions.

Regarding Training

What does your training program look like? What ongoing training do you offer?
Do you provide a mentor? For how long?
Do you assist in training my team?

Regarding Territory

What is my protected territory and how is it defined?
How many franchises have been awarded in my state? Have they all opened? If they haven’t, why not?
What are your plans to develop my state and how will that impact my franchise?

Regarding Cost

Can you give me a break down of all of the expenses associated with getting started?
How much additional capital will I need after I launch my franchise?
What goods or services do I have to purchase directly from you, the franchisor, and can I competitively shop for a better deal?
Is there a national advertising/marketing fund that I must contribute to?

Regarding Potential Earnings

What can I expect to earn if I join your franchise system, and does your franchise disclose this amount in your written materials?
Do you provide a pro-forma?
What is your average profit margin?
What is your average sales per month?

Regarding Franchisee History

How many franchisees have you added in the past year? How many have you lost?
How many franchised units have failed and why?
How have previous franchisee/franchisor disputes been settled?

What are some red flags to look out for?

Corporate takeovers: Pay close attention to item 20 of the FDD, which will give you information on the number of franchises transferred, canceled, or terminated; as well as the number of franchises that have not been renewed by the franchisor or have been reacquired by the franchisor. Corporate takeovers or terminations are red flags—possibly indicating there are failures due to training and support or infrastructure.
Resales: Are resales being sold at their prime for big profit? Or, are they selling to unload their business due to losses or no growth?
Unhappy franchisees: Another red flag would be several unhappy franchisees during validation calls. If you’re making validation calls and discover several unhappy validators, talk to the franchisor and see how he responds. Are they weak owners, or is the franchisor failing them?

How should you prepare for a Discovery Day?

Going through the buying process in its entirety is the best way to prepare for Discovery Day. By the time it arrives, you should have made your validation calls, reviewed the FDD to completion, had calls with the franchisor, and reviewed all materials/webinars provided. Discovery Day should be the day you meet the executive staff and see how they operate firsthand. At this point, you want to see if the brand and culture are a fit for you.

Discovery Day is also a good time to ask final questions regarding the FDD or validations, discuss attorney review and offerings, finalize territory maps, and ask about next steps. Take care of the following before you arrive to make your trip more efficient:

Confirm travel arrangements.
Arrive a day early, as most Discovery Days start first thing in the morning.
Ask about dress code—some franchisors prefer business casual.
Ask for an agenda.
Ask if you need to bring anything with you, such as financial information.
Prepare a list of final questions.

Jessica Melendez

A trainer and mentor for FranServe, Inc., the world’s largest franchise consulting firm, and the CEO of WestStar Franchise Group, Jessica Melendez coaches and educates prospective franchise owners and helps them find businesses that align with their personal and professional ambitions. As a franchisor and president of Dryer Vent Squad, Melendez has first-hand experience in all aspects of franchising, which makes her an excellent resource for prospective franchisees. Contact Melendez at 915-202-8272, email Jessica@weststarfranchisegroup.com, or visit https://www.weststarfranchisegroup.com.

11 03, 2019

Tough Road Ahead

Audra2019-06-02T13:44:44-04:00March 11th, 2019|Tags: adapting an employer’s mindset, franchise agreement, franchise consultant, recurring revenue structure, restoring credit score, SBA loan|

Tough Road Ahead

This antique car restorer didn’t let a bad credit score detour his plans.

by Diana Capirano
Certified Franchise Consultant

Like other Detroit natives, Anthony, a client of mine, worked at Ford Motor Company. Anthony, like prior generations of employees, had viewed positions at companies like Ford as secure, with a path to retirement. For 25 years, he felt his job was his safety net, but like many of you reading this magazine, he also aspired to own his own business through franchising.

On bad days, Anthony was committed to quitting, but he rationalized there were still goods days where he was content with stable pay, growing retirement savings, and a large pension—Middle America’s dream. Conflicted, he began an on-line franchise search, and in October 2016, one fateful click connected him to me.

Anthony shared his success as a prototype engine technologist and engineering tech for Ford, as well as his passion to restore classic and antique cars. He expressed a desire not only for “financial freedom,” but also the freedom that comes from owning your own business. He wanted a schedule with more time for family and hobbies. After years of designing and restoring cars, Anthony made a brave decision to re-engineer his life and his future.

Bumpy Road Ahead
Anthony’s story is not unique, but it’s highly inspirational. Along with mounting stressors at work, Anthony was caring for elderly parents in poor health, and he had just gone through a very ugly divorce. As a result of a damaging divorce settlement, his credit score plummeted more than 200 points to 560. Ouch! I knew that this would immediately disqualify him with franchisors and it would be impossible to secure a loan. Terrible credit is the “kiss of death” in our world, and his plans for an SBA loan were immediately crushed.

Certainly, this is not the first time I met someone with a disqualifying credit score, but it was the most impactful. Anthony never came off of the throttle. (For those who don’t yet know me, I’m a car enthusiast so pardon the metaphors). Anyhow, my client, a self-proclaimed pessimist and cynic suddenly became fueled with conviction and positivity. His original fears and doubts were now powered with purpose and focus to overcome this major bump in the road. For many, this would have been their jumping off point—a point of acceptance and giving up. Anthony’s innate problem-solving skills now defined his personal strength as he kicked into high gear.

Improving his credit to the targeted 700 score would not be easy, nor would it happen overnight. Still motivated to begin research for some great franchises, he began with the end in mind—freedom. He enlisted a credit-repair company and throughout the next 22 months, Anthony worked resolutely on building back his credit.

Over many months, he met with six franchises and he was transparent about his situation. Wanting to stay in his comfort zone (automotive), I convinced him to break out of that boundary to view other models. Most franchisors will not even engage a client with poor credit, but as they “looked under the hood,” they saw Anthony’s desire, determination, and drive—all qualities needed for a successful franchisee.

Anthony’s next key obstacle was adapting an employer’s mindset. After all, he had been an employee his entire life and a union worker for 25 years. Anxiety set in. Transitioning from receiving a guaranteed paycheck to being an employer who cut paychecks was worrisome.

By finding the right model with FISH Window Cleaning, he realized that a recurring revenue structure would create a more predictable income. Anthony became confident and excited for the freedom of a limitless paycheck. Here’s the best part…days after Anthony returned home from Discovery Day, he received an email that his credit score had reached 700. Finally, after all of that hard work, he was granted his loan and signed his franchise agreement with FISH Window Cleaning.

I hope Anthony’s story inspires you to take a path less followed. Anthony achieved his end goal—freedom, and in my opinion, his journey not only restored his credit, but also his credibility. He emerged just like one of his painstakingly restored cars—a total “classic!”

Diana Capirano, CFC, has an expansive career which includes corporate and franchise sales and development, marketing and operations, merger and acquisitions, structuring and negotiations as well as business ownership. As a highly-respected consultant and mentor, Diana espouses a profound commitment to help prospective business owners and investors understand and navigate the process of deciding on a franchise business. Contact Diana at 941-999-0095, email diana@focusfranchise.com, or visit http://www.focusfranchise.com.

11 03, 2019

With Age Comes Wisdom

Audra2019-03-12T11:04:05-04:00March 11th, 2019|Tags: established professional networks, flexible lifestyle balance, motivated to succeed, perfect age for business ownership, The 50-something life experience, wide range of experiences|

With Age Comes Wisdom

Why 50-somethings are at the perfect age for business ownership.

by Diana Capirano
Certified Franchise Consultant

Franchising is great for people of all ages, but men and women at mid-life are prime candidates for these opportunities. The 50-something life experience brings great value to business and the entire franchise system. If you’re not yet 50, keep reading—one day you will be and it comes sooner than you think.

One of the coolest things about franchising is that there is no age discrimination, but 50-somethings are prime candidates because often the kids are out of the house and they can focus on their own wants and goals. Even retirees are getting in on the action as business models are conducive to semi-absenteeism and allow a very flexible lifestyle balance. AARP and social security are just added bonuses.

As a franchise consultant, I help clients realize that along with business acumen, life experiences—personal and professional—are of huge value to franchisors. Stored applied knowledge, emotional intelligence, and transferrable skills from other careers can make a big difference in owning a business.

At age 50, you have better clarity as to what is missing in your life. Maturation somehow brings us to, “there must be more to my life than this.” The mindset shifts from what can we do for our employer to what value owning a business brings to us. We desire a higher form of our mid-life selves.

Statistically, the highest rate of entrepreneurship in the U.S. has been among 55 to 64-year old’s, and people older than 55 are twice as likely to launch successful new companies than those in the 20-to-34 age group. So it’s a misconception to think that only young people are risktakers and wildly innovative. Next time you think you’re past your prime, get inspired by Ray Croc (McDonald’s), Charles Flint (IBM), Bill Porter (E*Trade), and Bernie Marcus (Home Depot). Didn’t anyone tell you that 50 is the new 30?

WHY 50-PLUS WORKS

Although franchise models can be plug and play, the 50-plus age group has more to offer than you might think. Here are a few great perks that come with life experience.

Broad and deep life experience: Having had a wide range of experiences in the past, will help you handle new situations and relate to a broad group of people now.

Diversified knowledge and skills: People over 50 often have understanding in sales, operations, finance, training, and mentoring others. This builds confidence and flexibility.

Networks: The ability to leverage established professional networks can accelerate growth and provide recruitment opportunities.

Past failures: Likelihood of previous failures provides learning opportunities. It tends to make us less risk adverse and more motivated to succeed.

Accessibility: Now even retirement plans can be used to fund the business.

Diana Capirano, CFC, has an expansive career which includes corporate and franchise sales and development, marketing and operations, merger and acquisitions, structuring and negotiations as well as business ownership. As a highly-respected consultant and mentor, Diana espouses a profound commitment to help prospective business owners and investors understand and navigate the process of deciding on a franchise business. Contact Diana at 941-999-0095, email diana@focusfranchise.com, or visit http://www.focusfranchise.com.

8 03, 2019

The Art of Matchmaking

Audra2019-03-12T11:34:53-04:00March 8th, 2019|Tags: connect with several franchise brands, financial goals and qualifications, franchise consultants, personal objectives, professional goals and ambitions, research the brand|

The Art of Matchmaking

by Jessica Melendez
Certified Franchise Consultant

Not all perfect matches are about couples in love. The franchise industry has its own set of Cupids, otherwise known as franchise consultants, and they, too, are skilled in the art of matchmaking. How can you tell if you’re working with a quality franchise consultant? Just like a good life partner, you want a good listener, someone who puts your needs first, and knows what’s important to you. Here are a few signs that your consultant is a good one.

She gauges your seriousness.
Are you all-in or just exploring? You want a professional who is savvy enough to detect—and help you decide—if franchise ownership is for you.

She asks questions and listens to answers.
Once a franchise consultant has been enlisted to find the right match for a client, she should be focused on what her client is really looking to do. A good consultant will get to know her client on three levels: First, the personal level. What are the client’s personal objectives? More time with family? Less travel? Work from home? It’s important for the consultant to pay close attention here, because a client could be revealing his true motivation for business ownership.

Next, the consultant should inquire about professional goals. What is the client trying to achieve in his next business? Maybe he’s tired of answering to others and wants to be his own boss. Maybe he wants to build something to leave to his kids. Maybe he wants to diversify his portfolio. Professional ambitions are telling of what a client wants now and in the future.

The third level is financial. A thorough consultant wants to discover what the client wants to obtain financially. A six-figure income? A cash business? Scalability? The consultant also needs to understand what a client can financially qualify for and how comfortable he is with risk. A decent franchise consultant wouldn’t want a client to fall in love with a concept that’s not in his budget.

She has connections.
A quality franchise consultant will represent several franchise brands and—once armed with information about her client—can start matchmaking. The consultant will present options for the client to review, so he can decide who he would like to get to know further. A consultant should never be afraid to throw in a wild card to expand a client’s options.

She leads the client through the process.
Once a connection is made, the client has to decide if the match is right for him. How does he do it? Research. A quality consultant will encourage the client to research the brand and to get to the know the potential franchisor before signing on the dotted line.

A consultant will also suggest that the client speaks to other owners to validate the brand and get a first-person account of what the client should expect as a franchisee. And just like with Cupid, if the courtship goes well, then a union is made.

Jessica Melendez

A trainer and mentor for FranServe, Inc., the world’s largest franchise consulting firm, and the CEO of WestStar Franchise Group, Jessica Melendez coaches and educates prospective franchise owners and helps them find businesses that align with their personal and professional ambitions. As a franchisor and president of Dryer Vent Squad, Melendez has first-hand experience in all aspects of franchising, which makes her an excellent resource for prospective franchisees. Contact Melendez at 915-202-8272, email Jessica@weststarfranchisegroup.com, or visit https://www.weststarfranchisegroup.com.

4 03, 2019

Strategizing Validation

Audra2019-03-12T11:40:50-04:00March 4th, 2019|Tags: Build Rapport, franchise buying process, franchise support and training, franchise validation, questions to ask franchisor|

Strategizing Validation

Get the inside scoop from other franchisees before you make your final decision

by Diana Capirano
Certified Franchise Consultant

My clients hear me say it all the time, “Validation is where the rubber meets the road!” The validation process—when you talk to other franchisees about their real-life experiences inside the franchise—is an important part of the franchise buying process. In fact, the opinions of other franchisees can make or break your decision. This is where you hear how it really is from other franchisees—and when you can determine if similar experiences will work for you. The FTC limits how much the franchisor has to reveal, so you can talk to current owners about any omissions. Inside information from current owners is vital. So how do you make the most of it? Here, we give you five steps to help you make the most of the process.

Step 1-Identify your Targets
Make sure you talk to both top performers and low performers—at least two of each. This gives you a good sampling. Ask about franchise support, training, and the future vision of the franchise.

Include startups, those businesses that have launched within 18 months. This will help you validate start-up costs and track to break even. You’ll even be able to ballpark initial training costs, as it’s still fresh in start-up minds. Also, talk to people at the end of a franchise agreement. Will they renew? What differences have they observed, and how adaptable has the franchisor been to changes in the competitive landscape.
Talk to those closest to you in terms of location and those with similar demographic profiles. It can give a good indication of your target market and may become more relevant in businesses driven by local economies.

Step 2-Develop your Tool
Create a list of questions and include those that the franchisor was not “permitted” to answer. Use a list supplied by your consultant as a guide and add your own questions. Ask clarifying questions as part of a free-flowing conversation, not just a simple Q and A. You want detail. Organize your questions by category, such as financial performance, marketing, support, onboarding, and so on.

Step 3-Build Rapport
Learn about the franchisee and share your background to frame your questions. The higher objective is determining if this is a good fit for everyone. Take a few minutes at the beginning to encourage open-ended, engaged, and candid dialogue. Make it conversational. Focus on the difference between objective and subjective answers. Ask anything and don’t be shy—franchisees went through this same process and know the value. If anything was deemed a negative, ask these questions: Is the franchisor aware? What is the plan to address this? Remember: You are being evaluated as well.

Step 4-Take Notes
Hopefully you will be inundated with great feedback, but document who said what in case you want to circle back for further clarification.

As you organize your information, ask yourself what was most meaningful? Did anything surprise you? What were common themes, both positive and negative. A few other questions to ask yourself:

Can I see myself working with these owners? Will they be a support to me?
What made others successful or unsuccessful? Will the same apply to me?
Overall, do I feel better and encouraged? Or, do I feel leery and concerned?

Step 5-Share Findings
Share your feedback with your consultant and franchisor. Do they seem surprised by anything you’ve uncovered? A great franchisor should not be surprised about anything coming out of validation, but he should be willing to explain or clarify points if necessary.

Jessica Melendez

Diana Capirano, CFC, has an expansive career which includes corporate and franchise sales and development, marketing and operations, merger and acquisitions, structuring and negotiations as well as business ownership. As a highly-respected consultant and mentor, Diana espouses a profound commitment to help prospective business owners and investors understand and navigate the process of deciding on a franchise business. Contact Diana at 941-999-0095, email diana@focusfranchise.com, or visit http://www.focusfranchise.com.