Franchise Precheck

Franchise Precheck

Here's how you can simplify the process

When contemplating my exit from corporate life several years ago, I began by investigating franchises online. I clicked various links in hopes of finding clear, succinct information. And OMG, I created a cyber frenzy! My phone and email were blowing up, and I couldn’t even remember what buttons I’d pushed. I had started my search indiscriminately, without taking the following crucial first steps.

GUT CHECK

Make sure your motives are legitimate and defined. How seriously have you thought about owning a business, or are you reacting to a bad day at work? This doesn’t mean you know exactly what you want, just that you don’t want to work for anyone else. ASK: If I found a business that met my needs, would I commit?

Speak with your spouse or partner even if he or she won’t be involved. Will your significant other support your goals? ASK: How important is that approval to my decision?

Stay open-minded to various categories of businesses even if you’re leaning toward a particular one. Few franchises require that you have experience in a specific field and 98 percent of franchise owners invest in something outside their wheelhouse. ASK: Can I leave my comfort zone?

Face reality and fear of the unknown. This mainly has to do with your confidence level and inner motivation. ASK: What’s the worst that could happen? Weigh it against the best-case scenario. This requires a second gut check. ASK: Do I take ownership and accountability by relying on yourself, or do you tend to rely on others?

FINANCIAL CHECK

Determine your comfortable investment level. Spending money without a guarantee means risk, but franchising is the lowest-risk option statistically. There are many budget-friendly possibilities, or if your resources allow, you can adopt the go-big-orgo-home approach. Start-ups go from $10,000 to $4 million. ASK: What amount can I comfortably assume? What is feasible?

Figure out your net worth and know your liquidity. Some franchisors have stringent requirements; lower-investment franchises may have none. ASK: What are the best options with my financial profile? If you need funding, a credit score of 685 or higher is preferred, but there are options even with poor credit. ASK: What is my credit score? (Then pull a free credit report.)

KNOW YOUR WHY

Focus on what’s driving you to business ownership. Be objective and remove emotion. ASK: What’s my present need and what’s my end goal? If you’re just burned out, your present need may be a vacation. If being an owner represents the best route to the end goal—better quality of life—take the vacation and then start your search.

KNOW YOUR WHEN

Have you been thinking of business ownership but failed to make a solid plan? If you’ve vetted opportunities before, ASK: Why did I not move forward?

Timing is everything. Maybe you did not complete the checks above. Maybe you weren’t serious enough before or were just exploring. ASK: What’s different now? Am I ready now?

KNOW YOUR HOW (AND YOUR WHO)

In doing research, brand websites, online articles, social media, other business owners, and books can help. But too much information can create confusion. ASK: Would I benefit from objective expert advice? Franchise consultants have access to many brands but are trained to assist you beyond the search. A skilled adviser will educate, research, present, coach, and provide resources.

Your consultant and franchisors will lay out a process. Be engaged and be honest. This is the first step to understanding whether you’ll make a good franchisee. Speak to any successful franchise owner and you’ll hear, “just follow the process.” From your initial encounters, franchisors will determine whether you can follow the system and whether this opportunity is right for you.

Diana Capirano, CFC, has an expansive career that includes corporate and franchise sales and development, marketing and operations, mergers and acquisitions, structuring and negotiations, and business ownership. As a highly respected consultant and mentor, Diana espouses a profound commitment to helping prospective business owners and investors understand and navigate the process of deciding on a franchise business. Contact Diana at 941-999-0095, email diana@focusfranchise.com, or visit www.focusfranchise.com.