Roadmap to Opening a Franchise
One of the keys to your success in franchising is arriving at the starting line ready to go. Not just with the right attitude, but a complete preparation for the journey ahead. It’s important to be familiar with how the franchise buying process works from the start.
The right preparation means knowing that you are not going solo, but that you are joining a team that is already quite successful. This article by Sid Lee compares the different options you have available to you when starting a business. Make sure you understand why franchising may be the best vehicle available for the achievement of your goals.
So, arrive at the starting line with confidence. If you haven’t done so already, go back and complete your first 3 steps, then continue here. Looking at the Roadmap, your starting line is Step 1: Self Evaluation and Preparation. We’re only going to review steps 1-4 in this article. By that point, you’ll be months into a consulting relationship with your franchise advisor and during steps 5-9 you will probably be working more with the franchisor than with your advisor.
1. Self Evaluation and Preparation
The importance of “knowing thyself” can’t be overstated here. You are most likely preparing to enter into a 10 year contract as a new franchisee, so you must be confident that you are the right person for this undertaking. You can confirm that you are built for this franchising journey by taking the DISC Assessment. For each prospective franchisee, this is a vital part of the franchise buying process.
After completing the DISC Assessment (takes 5-10 mins), you should consult with a franchise advisor to help you understand the results. The link for the DISC Assessment is located within our Premium Content area.
As part of this step, you should to do some gathering of your background information. Here are a couple of documents for you to complete. The first one is your Education and Work Experience form. The second one is your Financial Profile Builder form. Regardless of who you choose to be your Franchise Consultant, completing these forms will help you present yourself to any franchisor. You can find both these forms and complete them online in our Premium Content.
2. Franchise Research
If you’re serious about buying a franchise in the next year or so, you should have watched the video “Guide to Buying a Franchise,” completed your DISC Assessment, and filled out both the Financial Profile Builder and the Education and Work Experience forms.
If you haven’t done so yet, start exploring some franchises. We have over 40 top performing franchise models for you to look at including their descriptions, videos, podcasts and in-depth franchise summaries.
At this point, it’s time to put your chosen franchise advisor to work. This is where a quality consultant will go the extra mile. Your advisor will create extensive reports and get all your franchise research questions answered. You might also read a couple more blogs at this point. You should check out the best franchises to buy and another on the importance of franchisor financial statements.
3. Validation Process
It’s hard to believe, but in my conversations with a highly qualified franchise advisor, I found out that many new franchisees don’t do exhaustive research on their chosen franchise before they buy it. If their is one piece of research you can never leave out, it’s your franchisee Validation.
The franchise laws are written so that you can fully research a franchise before you buy it. As a rule, franchisors are required to keep a list of all current and past franchisees on record. Furthermore, the franchisors are obligated to share that list with you, the prospective franchisee.
This is a perfect opportunity for a candidate to talk to all those who own or have owned the same business you are looking to buy, before you buy it. Try doing that in the non-franchising world of business! In addition, I’m told that many will really be transparent with you regarding their experience.
Don’t make a critical mistake. Read Sid Lee’s blog, “Validation: Questions to Ask Franchisees.”
4. Attend Discovery Days
One of the great benefits of using a franchise advisor, besides being a totally free service, is that the good ones have established relationships with franchisors.
Introductions, communications and general knowledge of the franchisors are far superior when dealing with an experienced advisor. Your advisor can help you understand what will occur at your Discovery Day with various franchisors to help you see the importance of attending them.
Here’s a blog post by Chris Wall at the Franchise Brokers Association titled “The Importance of a Discovery Day when Buying a Franchise.”
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“Getting pink slipped should not be the worst day in anyone’s life. It should be considered a gift, the gift to step out and experience what the rest of the world knows. The rest of the world sees the USA as the land of opportunity.” –Sid Lee, CEO at Choice Franchise Advisors