With so many franchise opportunities available today, would-be franchise owners can be overwhelmed by the number of choices in the marketplace. But it’s nice to have plenty of options – especially when making a big decision like purchasing a franchise.
So, the question now is: how do you narrow down the field and choose the best franchise for you? Every prospective franchisee has certain things that they want (expect, actually) from their would-be franchisor. Below are 5 things a potential franchise owner (like you, maybe) needs to expect from a franchisor:
1. A Professional Image
Nobody wants to buy a franchise that does not appear professional. Fortunately, today’s franchisors have many contact points that can give you an idea of how professional they are, such as their:
- Company website
- Headquarters
- Franchise sales department
- Stores
- Employees
- Franchisee interactions
- Marketing/advertising materials
- Products/services
Franchisors have only one opportunity to make a positive impression and look professional to consumers and potential franchise owners.
2. An Estimate of the Upfront Costs
Prospective franchisees would like to know what is required to open a franchise business, especially the financial part.
The cost is one of the first things a potential franchise owner will look for when they land on the website of the franchise opportunities that interest them. So, the information about the upfront (or initial) investment should not only be where it can be easily seen, but it also has to be accurate.
For instance, if the initial investment amount is between $175,500 and $225,000, a prospective franchise should not have to spend above $225,000 to open the business.
Tips for franchisees: Reach out to current franchise owners asking them how much they spent upfront, so you can be sure of the initial investment required to open the business.
3. Territory Protection
Territory protection is another crucial thing today’s franchisees should expect from the franchisor. And it is a nice thing to have in many cases.
Imagine investing your hard-earned money in a franchise, only to learn four months later that another franchisee will be opening up a franchise location a few miles from your own. It can be worrying.
We could remember receiving a call from one of our clients we helped to buy a franchise. He was angry that a new franchisee in a nearby territory was encroaching into his own, making him lose business.
Losing business to a competitor is one thing. But losing business to another franchise owner of the same company is quite another.
We later contacted the franchisor to complain about the client’s problem. That’s when we found out that although each franchisee of the company has their own territory, they are not “protected” ones.
Tip for Franchisees: Go through the franchise agreement carefully. It’s even better to hire a franchise lawyer to read the document and help you understand what it contains.
Note that this issue of unprotected territory (like the one we shared above) is very rare. We have been involved in franchising for more than ten years and have only seen such a situation once.
4. Support
The term “support” has different definitions. But it’s commonly used wherever the franchise business is being discussed. Franchise owners expect some kind of support from their franchisor. And they expect it to be great.
Support from your franchise corporate office needs to include:
- Ongoing training
- Legal assistance
- Fixes for issues that have to do with technology
- Field visits
- Resolving customer complaints when necessary
And lots more.
5. Assistance with Site Selection
Not all franchisors have a dedicated real estate person or department. If your would-be franchisor does, that’s great. But if they don’t, ensure they have access to commercial real estate agents in your area. When you pay the upfront fee, you are paying for the franchisor’s proven expertise in the business, and that should include real estate. The folks at the franchise corporate office should know what to look for and what to avoid when choosing a good franchise location.
Tip for Franchisees: During your franchise research process, ask existing franchisees what they think about their franchise location and whether the parent company offered any assistance in finding it. Also, ask how long it took them to find their present location.
If you are looking to become a franchise owner soon, it’s normal to expect certain things from the potential franchisor. Existing franchisees should be able to tell you if your expectations are going to be met when you eventually join the franchise family.
