For Better Franchise Buying Decisions Choose Education NOT Salesmanship.
Truths To Consider When Buying A Franchise
First, the majority of people thinking about buying a franchise believe that franchising is a magic elixir where prosperity reigns supreme. That’s a falsehood and we’ll explain further. Second, those who do buy franchises do not conduct adequate pre-purchase due diligence. Again, further explanation to follow. Those two ‘facts’ are the main reasons why people fail and wish they had never entered the world of franchising. Not fitting the franchise mold and not performing adequate due diligence are fast tracks to bankruptcy and unhappiness. If you’re thinking about becoming a franchise owner, do yourself a favor. Accept these caveats simply for their pure truth.
First is the highly touted magic of franchise ownership and success. Franchising’s message of magical success has always been well advertised but never well substantiated. Why? Because it’s not as successful as promised – never has been. If you’ve been around the franchise industry for any length of time you’ve heard common phrases. A top vote getter is: ‘In business for yourself, but not by yourself.” Is it true? Sometimes. How about the decades old boast that ‘92% of franchises are successful while 80% of independents fail”? Simply not true! So how does one go about buying a franchise with some, or a large, degree of confidence? Here’s how in three steps. Not simple steps, but adequate if applied seriously.
Is self-employment a logical career option?
Tons of material are available on the subject, but it all comes down to a personal belief that independence is preferable to being an employee. We developed a total system that assists in this discovery process. If you use the process as intended, you’ll end with a pretty clear word picture of yourself as an entrepreneur and business owner. Not only will you come to terms with whether or not self-employment is a reasonable choice, but what field or type of business you might be best suited for. We call it a ‘Personal Entrepreneurial Portrait‘. See ‘The Focus Program for Emerging Entrepreneurs.
Is franchising for you?
This is the simplest of the three questions to answer. To function with minimum conflict in a (good) franchise environment you should be OK with: following the rules, continuing to pay royalties after you’re a veteran with the system, accepting direction and changes from the franchisor, and understanding that you are on a legal timeline of ownership according to your franchise agreement. Yes, there are other issues, but if you’re OK with the basics, you can probably check that box.
Is ‘that’ franchise worth buying?
Similar to question one, the answer here requires a lot of work, but if this is your first time buying a franchise, you need expert advice and counsel. Why? Because there are many questions to ask and new comers don’t understand what to ask or where to find the answers. In our experience, far fewer than 10% of buyers ever complete adequate pre-purchase franchise due diligence. Instead, 90%+ make an emotional decision. They fall in love with the idea, the concept, the salesperson, or something that allows them to emotionally justify a purchase and discount reality. Commit to professional franchise due diligence NOT free franchise consulting, which is another term for franchise sales and brokerage.
To sum up, know that you want to be self-employed and know that you can operate within the guidelines of a franchise. You can make those decisions on your own. Regarding franchise due diligence, know that since the late 1990’s franchise brokers and salespeople have adopted the term ‘franchise consultant’. It’s always free of course, and it sounds better than broker. Get the point? The critical fact is that these folks are selling franchises and they are NOT going to harm a sale by providing any type of due diligence. Whether they are actually able or not able to conduct due diligence is another question. Protect yourself.
We have never sold a franchise, been paid a commission or accepted a referral fee relative to a franchise buyer. That’s not our business. The Bibby Group is and always has been a ‘fee for service’ consultancy helping the two sides of franchising: those who want to franchise their successful business and those interested in buying a franchise. Our pre-purchase due diligence for franchise buyers is second to none, affordable as a minute percentage of purchase price and a darn good hedge against making a bad purchase that can ruin your life.
IF YOU’RE BUYING A FRANCHISE AND NEED HELP, JUST REACH OUT.
OUR MISSION: PROTECT FRANCHISE BUYERS – THEIR ASSETS – THEIR FUTURE
CHOOSE FRANCHISE EXPERTISE NOT SALESMANSHIP