Buying a franchise for sale is one of the most important and pain-staking decisions an entrepreneur can make. Recession or no recession, finding a franchise that will bring a return on your investment will take a lot of research and consideration.
People exploring new franchise opportunities, therefore, will be interested in a new column in Entrepreneur magazine about researching franchises. The story quotes FranChoice CEO Jeff Elgin, who says franchisees should ask three direct questions to franchisors before signing on the dotted line.
What is the franchisor's number one focus?: If the franchisor says it is not the franchisee, warning bells should immediately be ringing in your head.
Why do franchisees get in trouble?: Not every franchise is going to be successful, and rather than just focusing on the lucrative ventures, ask about those that have failed to grow to learn if there are any lessons for your potential set-up.
How are conflicts resolved?: The way a franchisor handles problems with its franchisees will tell you a lot about his/her philosophy and mind-set. Elgin also says to be wary of a franchisor who doesn’t admit to trouble occurring from time to time.
Essentially, Elgin says, if you’re not to ready to ask franchisors the hard questions, then you could be dooming yourself to certain failure.
It’s also suggested that people speak with other franchisees to get an honest and realistic perspective on exactly what to expect. Questions about marketing strategies, organization, and the financial reality of the franchise should be raised.
On a side note, those interested in the defining characteristics of successful entrepreneurs should visit the blog tomorrow, as Franchise Direct CEO Sean McGarry will discuss the subject in his latest Franchise Insights video.