Buying a franchise? You better have a list of questions to ask franchisees.
A common question/concern among those who consider buying a franchise is, “How do I know the franchisor is telling me the truth?” It is understandable considering the sales world we live in today. However, if you want to have a high level of confidence in the franchise you have decided to purchase, there is a way. It’s actually baked in to the franchise buying process. “Validation” is having a list of questions to ask franchisees who have already purchased the franchise you want to buy.
My business has been built on helping people get all the information they need to feel fully informed and confident in making, arguably, the most important decision of their lives: investing in themselves.
It is very normal to fight the internal battle and lose out to the fears that make indecision easy. The consequence of indecision will result in an indeterminable and enduring emptiness. A lingering, haunting feeling of “what if.”
Well, the reason you didn’t was because you didn’t have enough information. In addition, you probably had some misperceptions and uncomfortable feelings that you did not fully resolve. You bailed out too quickly! You need to finish the whole process.
The last and most important step when researching a franchise is validation.
Validation is unique to franchising. What other type of business could you start in which you could call other business owners and they would be honest with you about whether or not it was a good business to be in? You can learn whether or not the franchisor had lived up to its promises. You can find out whether or not everything the franchisor had told them was accurate. This couldn’t be done in any other business system. You could try, but it’s the rare business owner that would help you.
Yet many people never validate what they have been told by the franchisor. They either blindly accept what they have been told or they dismiss that they have been told without evidence.
There are 21 required items for disclosure in the Federal Disclosure Document.
In an attachment or exhibit to the document there is always a list of all current and past franchisees, with contact information. I feel it is the most important step in the research process to call as many of those franchisees as possible. You need to get confirmation that everything you have been told is the truth. It is necessary to get a good feel for the actual support you’ll receive from the franchisor. In addition, you need to get a sense of the culture being nurtured by the franchisor.
Mostly, I have found franchisees will be very open and honest about their experience. Many will tell you whether or not they think they made a mistake in accepting the franchise. You’ll find out if they feel the franchisor has assisted them through hurdles and roadblocks they experienced along the way. In the validation process you will gain a confidence that you are making the right decision and that what you are hearing is accurate. Some franchisees will be proud to disclose how much they are making. Some will just provide an overview of their perspective; good, bad or indifferent.
It is best to go into a validation call with a prepared list of questions to ask franchisees. Ask the same questions to all, and the truth will fall on the trend line. Only then can you truly complete the research and make a fully informed and educated decision to either move forward or back out. It will be your decision and there will be no lingering feelings of “what if.”