Part 2 of a 10-Part Series on the AAFD Road Map to Buying a Franchise.
Once you’ve decided to take the franchise route, you may be itching to rush through the franchise selection process so you can hang an “Open for Business” sign on your new location as soon as possible.
Rushing in the beginning of the franchise search process leads to bad decisions that could cost you some significant money and frustration in the long run, especially if you choose a franchise that is not the best fit for your personality and budget.
Instead, take your time and enjoy the selection and evaluation process. Take care in building your “franchisee success team” and listen to the counsel of your advisors. Also, make sure you give yourself plenty of time to understand your own needs and wants and the requirements and corporate culture of the franchisors you’re most interested in.
Below is a list of eleven important questions I’ve devised that every “would be” entrepreneur should ask themselves early in the franchise search process. Ask yourself these questions with an open mind and be honest with your answers. Carefully consider the results and share them with the appropriate members of your franchisee success team.
You may be surprised by what these questions can unearth:
1. What are my primary personal interests, business interests, skills, strengths and weaknesses?
2. Do I have the business skills required to be successful at the franchise(s) I’m most interested in?
3. Am I prepared to follow the business plan and operations system of a franchised business, or do I prefer an entrepreneurial opportunity where you can truly ‘be your own boss?’
4. How much money do I have, and can I afford the financial risk of franchise investment?
5. How much money will it take to fully fund the purchase of a franchise, including start-up costs and working capital for my first year of business?
6. How can I find and qualify for financial funding?
7. If my franchise fails, what are my rights, and what would the consequences be for my long-term financial health?
8. What kind of support does the franchisor provide?
9. Does the franchisor recognize and work with an independent franchise association, or a chapter of the AAFD, that represents the interests of franchise owners?
10. Does the franchisor collectively bargain with its franchisees, and what is my franchisor’s reputation for fairness and support for its franchisee network?
11. Has the franchisor earned the AAFD’s Fair Franchising Seal?
Surprised by any of your answers to these questions? If you realize that you need to learn more about how your franchisor treats its franchisees, visit www.AAFD.org to learn more about our Fair Franchising Standards and what it takes to earn the AAFD’s Fair Franchising Seal.