When you enter into a franchise agreement, you are taking on a business partner for the life of your franchise. The Franchisor will provide the initial training and on going support for everything from technical issues to marketing advice. To make sure you know exactly who you are going into business with, it is import to thoroughly interview the Franchisor. Many clients tell me they know they should be asking a lot of questions, but they don't know exactly what to ask. Here is a list of questions to help you get started. As you hear the answers to these questions, you will probably think of many follow-up questions that will provide you with the information you need to make an informed decision.
1. What are the strengths of your franchise?
2. Where do you see this franchise system in 5 years and what steps are being taken to reach that goal?
3. Who is your competition?
4. How are you viewed in the consumer marketplace?
5. Can you give me a break down of all of the expenses associated with getting started (franchise fee, equipment, product, training, real estate, etc.)?
6. How much additional capital (working capital) will I need after I launch my franchise?
7. Please explain the contractual responsibilities if I join your franchise system (length of agreement, renewals, etc.).
8. What can I expect to earn if I join your franchise system and do you disclose this amount in an Item 19 Earnings Claim?
9. What does your training program look like? What kind of ongoing training do you offer?
10. What goods or services do I have to purchase directly from you or your preferred vendors, and can I competitively shop for a better deal?
11. Is there an advertising fund that I must contribute to and what rights do franchisees have to audit that fund?
12. What is my protected territory and how is it defined?
13. What are your plans to develop additional franchisees in my state and how will that impact my franchise?
14. How many of your franchisees have failed and why?
15. Will you assist me with financing, real estate selection, and construction?
16. Have you been sued or are you currently being sued?
17. How have previous franchisee/franchisor disputes been settled?
18. What happens when I want to retire or sell my business?
19. If I sell my business and leave the franchise system, what am I forbidden to do?
20. What is the biggest complaint from your franchisees?
http://www.metafranchiseconsulting.com/
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Showing posts with label research. Show all posts
Showing posts with label research. Show all posts
Tuesday, July 13, 2010
Friday, April 16, 2010
1 Month Check Point
Today marks the end of the first 4 weeks of business ownership. It has been a month of highs and lows, celebrations and disappointments. The most important thing is that I have learned a lot!
Lessons from Month 1:
1a. Don't be afraid to speak up. I called and emailed a Franchisor multiple times over the course of several days and didn't get a response. This is HIGHLY unusual. Most Franchisors call or email me back within 1 hour. The lack of response (and a couple other things that day in particular) had me really frustrated so I left feedback on my Alliance's broker site about the lack of responsiveness. The manager of the broker site saw the feedback, got a hold of the Franchisor, and told them to straighten up or they could not be part of the Alliance. Hopefully that saved another broker some headache.
1b. Think before acting. I really feel like I got lucky with 1a. I acted hastily and could have made a name for myself as a problem child. The manager of the broker site was understanding of my beginner's frustration and agreed to remove my feedback from the site. A fresh start!
2. I will close 1 out of 100 deals, on average. I put in a lot of time and effort doing research for my clients. Often, they have second thoughts and stop returning my calls. I need to learn to expect it. After all, it is not personal, just business. After one of those clients I am closer to helping my next client achieve their dream of business ownership.
3. Don't assume a lead is invalid too quickly. A couple of leads have come to me that say my potential client is looking at a franchise that is not in my Alliance. I can work with "outside" franchises if that is what my client wants. My job is to listen to my client's requirements and match them to the best possible franchise, whether inside or outside of my Alliance. For example, a client recently contacted me about a franchise that is a great restaurant, but not a great franchise. After discussing what my client really wanted from a business, I provided him with other options. My client agreed his first idea wasn't the best fit and has decided to work with me on the other options.
4. Follow my instincts. I have one client who was so excited during our initial call that he did most of the talking. He thought he and his business partner had all kinds of great ideas and he wanted to see what I would come up with. He gave me their requirements and I did my research. I called him at our scheduled time to review my findings. He said he and his partner were looking at lots of different things at the moment and I should just email my findings. From my training I knew that was outside the normal protocol, but I felt like I was losing my client. I knew I had great options for him based on his requirements, so I sent the email. He emailed back immediately and LOVED one of my ideas. That was on 4/14. By 4/16 he and his partner had talked to the Franchisor multiple times and they were already scouting locations for at least 3 restaurants!
So much excitement in just 4 weeks! In the next 4 weeks I'm hoping for additional excitement in the form of reaching new milestones and, of course, learning more lessons that will ultimately help me be successful.
http://www.metafranchiseconsulting.com/
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Lessons from Month 1:
1a. Don't be afraid to speak up. I called and emailed a Franchisor multiple times over the course of several days and didn't get a response. This is HIGHLY unusual. Most Franchisors call or email me back within 1 hour. The lack of response (and a couple other things that day in particular) had me really frustrated so I left feedback on my Alliance's broker site about the lack of responsiveness. The manager of the broker site saw the feedback, got a hold of the Franchisor, and told them to straighten up or they could not be part of the Alliance. Hopefully that saved another broker some headache.
1b. Think before acting. I really feel like I got lucky with 1a. I acted hastily and could have made a name for myself as a problem child. The manager of the broker site was understanding of my beginner's frustration and agreed to remove my feedback from the site. A fresh start!
2. I will close 1 out of 100 deals, on average. I put in a lot of time and effort doing research for my clients. Often, they have second thoughts and stop returning my calls. I need to learn to expect it. After all, it is not personal, just business. After one of those clients I am closer to helping my next client achieve their dream of business ownership.
3. Don't assume a lead is invalid too quickly. A couple of leads have come to me that say my potential client is looking at a franchise that is not in my Alliance. I can work with "outside" franchises if that is what my client wants. My job is to listen to my client's requirements and match them to the best possible franchise, whether inside or outside of my Alliance. For example, a client recently contacted me about a franchise that is a great restaurant, but not a great franchise. After discussing what my client really wanted from a business, I provided him with other options. My client agreed his first idea wasn't the best fit and has decided to work with me on the other options.
4. Follow my instincts. I have one client who was so excited during our initial call that he did most of the talking. He thought he and his business partner had all kinds of great ideas and he wanted to see what I would come up with. He gave me their requirements and I did my research. I called him at our scheduled time to review my findings. He said he and his partner were looking at lots of different things at the moment and I should just email my findings. From my training I knew that was outside the normal protocol, but I felt like I was losing my client. I knew I had great options for him based on his requirements, so I sent the email. He emailed back immediately and LOVED one of my ideas. That was on 4/14. By 4/16 he and his partner had talked to the Franchisor multiple times and they were already scouting locations for at least 3 restaurants!
So much excitement in just 4 weeks! In the next 4 weeks I'm hoping for additional excitement in the form of reaching new milestones and, of course, learning more lessons that will ultimately help me be successful.
http://www.metafranchiseconsulting.com/
Share
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