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As the saying goes, “The best predictor of future behavior is past behavior.” While that saying typically refers to human behavior, the same is often true for corporate behavior. After all, the company culture, policies, and procedures shape how things are done inside an organization. If either of those caused a franchise to experience big wins or make tough mistakes, you could likely predict the same will happen unless significant changes were made.
This is perhaps one of the biggest reasons why many checklists for what to look for in a franchise before buying include checking the franchise’s history. But where do you start? How do you dig into a franchise’s past behaviors to predict what life will look like when you leap into franchise ownership with that brand? We’ve got you covered.
Look at the Franchise Disclosure Document
The Franchise Disclosure Document (FDD) is a core resource for researching a franchise before becoming a franchisee with them. This document lets you glimpse their past, uncover where things stand today, and where they’re going. Financial statements. Litigation history. Fees and costs. There’s a treasure trove of information that will shine a light on the franchise’s history so you can make a more informed decision.
Beyond the numbers alone, the FDD also offers context about the franchise’s origins. Knowing why the company got started can help you understand the organization's trajectory and your franchise success if you start that particular business.
Investigate the Franchise Online
There’s a perk to living in a digital age like today: the ability to become an online detective. Online sleuthing can lead you down rabbit holes of information that might not be offered up as transparently in the FDD or franchise communications. It’s good to hit the Internet to learn more about the franchise’s past.
Some of the best ways to investigate the franchise online are through news articles, on social media, and in past industry publications. Remember that you aren’t only looking for damaging information when going through this exercise. You’ll also want to look for significant events in the franchise’s history, accolades the franchise has received, and blips of growth in the business’s journey. This approach allows you to get the bigger picture of what’s happening, so when you uncover something negative, you can calibrate just how vital that information is against the backdrop of all the franchise has started.
Talk to Other Franchise Owners
Talking with other franchise owners will give you the most accurate glimpse into what it’s like to become a franchisee for that particular organization. Talking to other franchise owners outside of your immediate location will allow you to understand better what you’ll experience, the challenges you can expect to encounter, and the successes you can expect to have.
Finding current franchisees isn’t as complicated as it might initially seem. Looking online at social media platforms, attending franchising expos, or attending industry-specific events can put you face-to-face with these individuals. Once you’ve started that conversation, talk to them about their lifestyle and how they’ve approached owning this franchise. Hearing their stories will give you a more well-rounded understanding of where the franchise has been and is going.
Digging into a franchise’s past will equip you with more information about what the future will look like. Will they do what they promise? Will you be supported in your journey? And is this the right franchise for you? The answers will start to appear as you do your research.
Kimberly Crossland is the founder of Roadpreneur and Cruisin' + Campfires, two companies designed to keep families together and living in freedom through travel and entrepreneurship. The goal of both businesses is to inspire meaningful change through the power of a strategic, thoughtful approach to life and business. In her free time, you can find her looking for a new adventure together with her two boys.