Choosing a Franchise is YOUR Decision.
This is a recent inquiry that others might find interesting.
“I recently went through an evaluation with a franchise placement company to get help with choosing a franchise. They concluded that my best franchise opportunity exists within something I have little or no interest – a retail shop. I feel that I have to have an interest in a business in order to be successful. However, the placement expert says otherwise. He says that I have to demonstrate leadership and place the right people within the business for me to succeed. Who is right?”
Choosing a franchise is YOUR decision only.
You are 100% right, and this placement person 100% wrong. First, no one but you should decide which business best fits you, your personality and your needs. Second, to make matters worse in this case, the counselor argues with you after you express discomfort. Run from that kind of help.
Most franchise consultants offering “free” services to help us find the right business can make life a bit confusing because their focus is on selling an opportunity that pays a commission, while all the time making us feel that our needs are being met. Nothing is free, and under this arrangement, the consultant has established relationships with certain franchisors that have agreed to pay a commission when a sale is made. Now, the process might work for quality franchisors that use such agents to identify the right franchisees for their program, but the same process can be terribly unfair for inexperienced buyers.
(As an aside, when people ask for our help, they are surprised to know there is a fee for services. But once explained, most serious buyers want a consultant who is truly working for them and not a business opportunity seller. The cost of a franchise goes way beyond the “total initial investment”. Time, emotion, money, and especially the cost of a bad decision are critical factors. Be sure that you are the most important element in the equation.)
There are numerous ways to conduct due diligence on franchise opportunities and they range from questioning franchisees to spending a few days immersed in the franchisor’s business. Quality franchise companies welcome your examination (if you are a qualified, serious candidate) and you will be made to feel comfortable as you search for answers to your questions. However, if you are side-stepped during the due diligence phase, you have most likely found a hole in the offering and this is the sign of a less than high quality opportunity.
Returning for a moment to the idea of using a consultant, I think that they can provide great insight concerning the industry in general, if they actually know their subject, so ask about their background, their experience and the length of time they have been in the business. Work with a consultant who offers a logical “screening mechanism” that helps you reach conclusions about your options.
And last, when choosing a franchise, understand that there are nearly 100 segments such as pizza, printing, dry cleaning, etc., and you need to narrow your options or you will turn your search into a life long hobby of considering what entrepreneurial life “might be like.” The Focus Program for Emerging Entrepreneurs is a very helpful tool.
Take all the legitimate guidance you can find, but make sure YOU like the deal as much as the consultant or seller of the deal likes it. You, not anyone else, will live with the final decision.