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Choosing a franchise opportunity takes time, or at least it should, as there are multiple areas to consider before you hand over any sum of money. The first topic we covered was Choosing a Franchise: Understanding Yourself – This was focused on assessing what, if any, franchises would suit you depending on your personal traits. We are now focusing on assessing the franchisor, a step that’s often not seen as important, however, this is not the case. The franchisor after all is the person driving the franchise, driving the opportunity that you are investing in and, if they’re not committed to improving the franchise opportunity or assisting the franchisees, then you should look elsewhere as a better opportunity and franchisor likely exists.

Franchisor Support

One factor which may help you to determine the effectiveness of a franchisor, is the level of support that is provided. Every franchisor will give a certain amount of support and some franchise opportunities will require more support than others, due to the complexity of the system it involves. The areas you should ask your franchisor about support on are:

Set Up

Depending on your franchise opportunity, the set-up support may be that everything is provided to get up and running immediately, whereas, others might only offer minimal assistance and expect you to cover aspects such as premises, shop fittings, vehicles and staff training. Be sure to speak to the franchisor about what will be included, with regards to set up, in the franchise fee to understand what extra cost you may incur upon set up, then double check to see the true financial cost of set up.

Operations Manual

The operations manual may be provided to you as a method of assistance in areas that you will face in your franchise career, covering procedures for common aspects of business, such as:

  • Audits
  • Complaints
  • KPIs
  • Standard Requirements

Marketing

This does depend on the franchise opportunity but double check if yours has a marketing plan; one may be provided to you, to establish what you are required to do and what is provided by the franchisor, such as marketing resources. If this doesn’t appear to give you enough coverage for attracting customers, ask other franchisees about how well their marketing strategy is working for them.

Training

As we all know, you aren’t expected to be an expert on the franchise upon purchase, you may be required to have experience and qualifications but these will not be enough to understand how to successfully execute a franchise business. You will require extra training, to some degree, depending on the complexity of the system and it is important to understand what level of training will be provided for you. Be sure to check initial training but also ongoing training; for example, if the franchisor changes its operations method, will they retrain you themselves? A good franchisor will want their franchisee trained to be able to provide them with the best chance to succeed and is a good indicator of a great franchisor.

Ongoing Support/ Contact

Every franchise should have a level of ongoing contact available; some will offer direct contact with the franchisor and others will have a dedicated franchise contact. Check who your contact will be, find out when it is acceptable to contact them and their response times, but be sure to also check how many other people they support; a contact who is supporting 80 franchisees won’t be able to provide you with adequate support.

Territory

If you have an exclusive territory, this will be the area that you must stick to and you need to be sure that it has been chosen using methods to accurately estimate the amount of custom available there. If your territory was chosen for you, be sure to check how your territory was determined and question why they decided this was large enough or in the right area, as more rudimentary methods may have been used and it might supress your chances of success.

Choosing a Franchise: Assessing the Franchisor, Online Guide | Start Your New Franchise

The Franchisor

A franchisor that invests in themselves and their franchise is one that you want to work with, as they are actively trying to improve the support and service they can provide franchisees, in order to grow their business. What you need to do when assessing the franchisor is, try to understand if they are indeed investing in themselves and the franchise. A way to do this is to answer the following questions:

  • Is the documentation, franchise system, branding and services robust and well documented?
  • Is the franchisor open to feedback about the franchise on an ongoing basis?
  • Is there clear lines of communication and are they willing to answer/address any concerns?
  • Do they provide detailed earning reports?
  • Is news about their franchise online and if so, is it positive or negative?

Once you get an answer to these questions, you need to analyse them as they may not be straight forward or clear. You are trying to assess if the franchisor is really trying their best to make their franchise model a success which, in turn, means making all franchisees a success.

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