Buying or investing into a franchise system is a big life changing decision and will require a lot of research, dedication and networking. After all you are not just investing money; you are investing your time, talent and skills. Maybe even a lot of blood and sweat too!
Once you are ready to get into a franchise business, be ready to conduct a ‘Due Diligence Process’ of the franchise you are planning to be a part of. This process includes exploring every aspect of a franchise from training and support to the total cost of the opportunity. A complete and detailed investigation into the franchise helps determine how much of a perfect fit the franchise business is for you. Interviewing people who have purchased their way into the franchise system before you is really the way to go before you get on to the more financial aspects of the due diligence process.
This step of interviewing people who have purchased the system comes after you have already set a foundation of information on what the business is about. At this stage, you may have already contacted the franchisor, received the marketing materials, and reviewed the Franchisor Disclosure Document.
Through conducting interviews, you will get a sense of the culture of the franchise system even if the owners are similar or different from you. We recommend you talk to atleast 6 – 8 franchisees to understand their level of success, the income and expenses they incur, and understand whether or not the franchise system will increase your chance of success.
So, which franchisees should you call?
The Top Performer
Every franchise business will have a top performer or the superstar. He will be the one who is also generating the maximum revenue for the business. Talking to the leader of the pack will potentially give you insight into their level of success and whether or not it matches what you aspire to be. If not, maybe this franchise is not meant for you.
Start – Up
Talk to a new franchisee. Not just someone who joined, but to someone who has worked with the franchise system for at least three months. Ask them about the training programs and support they have received. Interview them on the entire process of taking up the franchise and how the whole experience has been thus far for them.
Talk to someone similar to you. Someone who is undergoing the franchise due- diligence process like you! This will help you understand where you are professionally.
Talk to poor performers as well to understand what is not working out for them and keep in mind about what they say and make sure you don’t end up doing it.
Toward the end of the interview process, make a few random calls to franchisees who may not be expecting your call. As your franchise agreement will be listing out all the franchisees in the system along with their name and contact information, you can get in touch with them.
For more support and details on starting up a franchise or conducting due diligence, talk to our professionals at FranchiseExpo today!