When navigating the world of franchising, you will undoubtedly be bombarded with all the exciting headlines and company quotes that promote brand success.
Choosing where to invest your money; not to mention your all-important time, can be daunting! So how do you dig deeper and quickly identify which brand and opportunity is right for you? You ask them these difficult questions…
Franchise brochures, adverts and company websites will all have general information. This may include how many years a company has been franchising, how many franchisees they have on their books, etc! You may even be lucky enough to find brands that readily give figures and terms, but what don’t the adverts tell you?
1) Can I talk to ALL or ANY of your franchisees and staff?
Many brands will have a few franchisee spokespeople; the ones who have overall achieved the pinnacle of success! These will be well versed in the brand mottos and corporate speak, but what about the other ones? Ask a company to allow you free rein in choosing whom to speak to within the organisation. This will give you a clue as to whether there are some they would rather keep hidden. Furthermore it will allow you to see how up front they really are.
We always allow access to our franchisees and staff, you can see some testimonials here or call us on 01202 233744.
2) Tell me about your failures… Have any franchisees not found success with your brand/company?
Overall, you can learn as much from failure as you can successes. Any company that has more than nine franchisees will, statistically speaking, have experienced the loss of a franchisee from its network. There is absolutely no shame in this. In-fact the experience of loosing a franchisee will indeed have taught the company a great deal about finding and keeping the right ones. Additionally this is experience you can benefit from.
So ask this with an open mind and look for a company with experiences they are willing to share. These are the sort of companies that will start your professional relationship with integrity.
3) Can you prove your figures and what are they based upon?
Every franchisor should be willing to have this conversation, some companies base their figures on a low, medium and high model, some a one – three year projection, others an average. Some company’s examples show only the top 10% of figures among their network. Making sure you dig deeper into the financials can discern whether you are looking at the aspirational or the attainable!
We are very transparent in our figures and discuss every eventuality with you at a meeting.
4) What are you basing my area’s figures upon?
It is important for you to understand the market not only nationally but also regionally, are there any particular regional variations you should be aware of? Does the brand work better in affluent or poorer areas? What variations have they seen regionally and how might that affect your performance compared to the company average?
We work with our franchisees to build a territory that encompasses enough of our customer demographic to ensure each area can achieve similar results, although some areas may fluctuate and are priced accordingly. This can be discussed in detail at a meeting or you can call 01202 233744 for more information.
5) Are there any further or hidden costs I should know about?
Outside of the initial franchise fee are there additional costs? A management fee or % (as with most franchise models) and do you have to provide an amount of working capital, buy any materials aside from this? Does the company take money on supplied goods? Depending upon the market you are considering entering there will be questions regarding suppliers and stock, it is important to be clear what monies you will be expected to bring to the table, not just up front, but in the future also.
We take an upfront fee and a small management fee, which helps us support and partially staff and market your business, we do not take kick backs from suppliers and in fact work on your behalf to secure the very best deals.
6) The package you offer is it mine or does it still belong to the franchise company
Anything a franchisor provides you with (sales kits, stock, vehicles, uniforms, merchandise or literature) will be owned either by them, you, or the new company, (or rented) understanding this will help you know how much you are spending and how much you are keeping in assets when you part with your cash.
Please call 01202 233744 or come and meet with us to go through terms.
7) Are there seasonal downturns or cash-flow hurdles I should know about?
Another thing to be aware of, is the market you are entering seasonal? Most are, it’s not just sun hats and pumpkins that see their popularity rise and fall throughout the year, service businesses, nearly all retail and many creative industries have fluctuations in trade. Understanding this can help you plan; in fact one of the many benefits of the franchise model is having industry experts to aid you in just this sort of area.
In the shutter industry there are highs (Jan sale and ‘order for Christmas promotions) and lows just following these (which allows us time to fit the orders we took in the high months), however the year as a whole is really rather consistent.
8) What happens if someone/a customer complains? Am I protected by the brand or on my own?
It’s not nice to think about future problems, but knowing what happens in any given situation can prepare you, so ask about product guarantees, complaints procedures, insurances and explore what happens if you should experience an unhappy customer.
It could be a company covers its products with a lifetime guarantee direct from the brand; it may be they don’t and you find yourself facing an unhappy customer with a faulty product alone and unprotected… It’s always best to ask.
We work with our franchisees to keep customers happy, our training and support enables you to do the best job possible for customers and our lifetime guarantee on our products allows customers to feel secure in their purchase. We will work together to uphold our reputation and turn problems around wherever possible.
Franchising – ask the questions, consider the answers and make the right choices
The franchising route is a great way to benefit from a company’s hard earned experiences good and bad, and successful companies will welcome scrutiny from prospective franchisees, after all your head for business will benefit them! In my experience good companies are more than happy to discuss all of the above, if an organisation welcomes difficult conversations and tackles them head on, you can feel assured they will continue this throughout their relationship with you. So don’t be afraid to ask!