Franchise Resources

There’s an active marketplace of franchises, and most of your preliminary research can be done right at home, online. At some point, however, you’ll need to put your interview skills to work, and probably hire professional legal assistance. Still, you can get started now.

Three questions to ask yourself before you plunge in.

  1. Do you envision owning a store front, with employees? Or do you prefer to think about operating from home?
  2. Are you willing to relocate, or do you want to stay where you are?
  3. How much money do you have available right now, as cash? How much borrowing power can you pull on?

With those answers in mind, here are resources that we think will take you to the next level in your search.

General background on Franchises

Take a look online by simply typing “Franchises [current year] ” into your browser. (Be careful; a lot of the information online is dated. Just like real estate or the stock market, what was going on in 2012 may not apply to today’s market.)

You will see that Entrepreneur magazine seems to have taken on the role of expert in the world of franchise information. Several of their authors are excellent – you may want to “follow” them for the latest news.

A second general resource is the Small Business Administration (SBA). Here in our region (Southern California) the SBA regularly sponsors excellent programs on how to select a franchise.  Note that the speakers are typically promoting one or another franchise, but that doesn’t mean you won’t get some excellent info — from the speakers and from others in the audience.

Franchise Directories

Again, the internet has made it possible for thousands of franchise opportunities to be listed, easily sorted by industry, geographical location, investment cost, etc. Here are three good sites for research – be sure to distinguish between “resources” and “sponsored” resources. (These days, the word “sponsored” means “paid advertising.”)

* http://www.franchisedirect.com/directory/

* http://www.franchising.com/

* http://www.franchisetimes.com/

Trade shows

Ultimately, you’ll want to get fact to face with franchisors. Here are a couple of shows to start with. Attending a conference or show can be a big investment, but you’ll likely gain insights and meet people you’ll never get by sitting at your desk.

* http://www.ifeinfo.com/ — International franchise expo

* http://www.franchise.com/business-franchising-events.cfm — lists local events

Preparing for interviews

If you are still interested, and are now getting ready to investigate specific opportunities, do your homework,. Remember, you will be being evaluated just as seriously as you are evaluating – there’s no reason not to be a knowledgeable as possible as you conduct interviews on the phone or in person.

Here are two “textbooks” to help you prepare – and to keep you out of trouble. (Click on the link to head over to Amazon, where we’re affiliates. We recommend you buy the paper versions so you can bookmark, write or highlight in them, compare, etc. )

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Franchise Bible: How to Buy a Franchise or Franchise Your Own Business Erwin J. Keup, Seventh Edition. The Franchise Bible originally came out in 1990 and has held the pride of place since then. It’s now in the 7th edition. Great forms and checklists for reviewing your personal situation, interviewing existing franchisees, evaluating a franchise site. The appendix contains sample Offering Circular, Franchise Agreement, with cliff notes.

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The Franchise MBA: Mastering the 4 Essential Steps to Owning a Franchise  Nick Neonakis, Sagar Rambhia and Aditya Rengaswamy (May 22, 2013). The analytical mind will appreciate the approach of this book; less demanding readers will appreciate a good read. Doesn’t overcomplicate; leads you step-by-step to making a decision to buy or pass.

 

Next steps

If you’ve reached this point, you next step will likely be to start calling existing franchise owners and interviewing them.  Prepare your questions in advance, and take good notes so that you can compare the different answers you get.

Finally, keep in mind that you’ll ultimately face D-Day, or Discovery Day. This is a visit you’ll make, on site with the franchisor, during which a final decision will be made. Again, remember, they pick you as much as you pick them!

We’ve meant this to be just an overview. There’s so much more to be said and to be learned! But if you’re still interested after reviewing the resources listed above, at least you’ll be headed in the right direction with some knowledge under your belt.

One last note: Can you trust a franchise broker?

There is always some controversy about whether a “broker” is necessary or desirable in the middle of a transaction. And as always, it depends . . .

In our experience, a good broker can be an invaluable source of information and experience to the first-time buyer. Since the broker is paid a commission by the seller (the franchisor), though, you may be worried about being talked into something. In our experience, a professional will only be satisfied and successful if the transaction is between willing and qualified partners.

So that’s where you come in. Do your part to prepare questions and interview brokers. Seek referrals or input from past clients. Be sure to get legal advice when you need it. Become one of the qualified partners that the franchisor is seeking, and you won’t have to worry about the broker.