Talking with Current Franchise Owners
Reading through a FDD is a key part of your research, but it can’t answer all the potential questions you might have about how it is to actually operate a given franchise. The best way to do this is actually to start talking to current franchisees. The best way is to this is to call or visit a franchisee, don’t just email them. You might need to be a bit persistent, but if you are then you can get all of your questions and concerns answered.
To find out where how to contact franchisees you should go into the exhibit section of the FDD, where most franchisors include a list of current franchisees, their complete name and contact info. If this information isn’t included then you should ask the franchisor how you can contact current franchisees. In addition, most franchisors list franchisees “who have been terminated, canceled, not renewed or have voluntarily or involuntarily ceased to operate the business during the current year.”
It's difficult to give an absolute number of franchisees who should be called. The size of the system has a lot to do with it. If there are only five franchisees, you should call all five. But in the larger systems, you'll have to use your judgment. Try to get a good cross-section of franchisees, and don't forget to call several of the franchisees who voluntarily or involuntarily left the system.
What will you talk to them about? You will ask them about all the things that are important to you. Glenn and Connie Schenenga, Future Kids (computer training) franchisees, spoke to many of the 40 or 50 franchisees listed and asked them questions like, "Are you making any money? Are you happy? What are the positives and negatives of the business?" Pretty basic questions, but ones that every prospective franchisee would like to know the answers to. You might also inquire about the hours involved in running the business, the relationship of franchisee and franchisor and, of course, when the franchisees turned their first profit.
If you contact a wide cross-section, you will undoubtedly encounter struggling, surviving, successful and super-successful franchisees. Try to determine, as best you can, why some are not succeeding. Is the franchisee taking advantage of the corporate support? Is the franchisee putting in the time? Perhaps the owner is an absentee one. Is the franchisee out selling? The point is to try and find out if the problems lie with the franchisee or with the franchise system.
Three Keys to Franchise Success
The first is to understand the key drivers of success in your business -- that is to say, the three or four major strategies or operational processes that make up the engine of profitability and success for your organization. As an example, for a restaurant these factors may include things such as speed, consistency, freshness, cleanliness and friendliness. For an auto parts store the key drivers will probably include inventory availability, customer service, expertise and pricing/margins. Once you understand the key drivers, it is critical that you focus on them incessantly and help everyone in your organization understand that it is their responsibility to make sure those drivers are the top priority for them every day at work.
Unique Sources of Funding for Your Business
Starting a new business can be an exciting venture with immense personal and financial rewards, but getting a nascent business venture off the ground can pose daunting financial challenges. While traditional sources of funding such as loans and investments are always an option, there are a number of unique and innovative sources of funding that can help new business owners get their ventures off the ground.
The Top Franchise Opportunities for Each Cast Member of Seinfeld
Based on their work history and personality, we’ve broken down the franchises that various Seinfeld characters might try to invest in if given the opportunity.
