Choosing The Right Franchise Is Difficult At Best
“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 The Right Franchise Is YOUR Decision Only
You’re 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.
Franchise consultants offering “free” services to find the right franchise can make life a bit confusing. First, free services equals brokerage, not consulting. The focus is on selling an opportunity that pays a commission, but you already know that nothing is free. The consultant receives a commission if you buy what they introduce. The process can be terribly unfair for inexperienced buyers.
(Note: We charge a fee, a fair fee for expert guidance and due diligence. The cost of a franchise goes way beyond the “total initial investment.” The cost of a bad decision in franchising is life changing. Protect yourself.)
Choosing A Franchise Demands Due Diligence
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. In fact, you should be made to feel comfortable as you search for answers to your questions. If, for whatever reason, you’re sidestepped 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 free franchise consultant, know that they can provide insight concerning the industry in general if they actually know their subject. Ask about their background, their experience and the length of time they have been in the business. Here’s a fact that make surprise you. Many ‘free’ franchise consultants are franchisees themselves. They purchased a franchise that sells franchises. You could very well be talking to a person who just finished a two week course on franchising.
You Must Narrow Your Options
When choosing a franchise, understand that there are probably 100 different industries represented such as pizza, printing, dry cleaning, etc. You need to narrow your options or you will turn your search into a lifelong 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 franchisor likes it. You’re the one who ultimately lives with the decision as a franchise owner. For a very detailed read on choosing and buying a franchise read this section.