Franchise Buying Advice: Make Pancakes!
Franchising has done for business what Bisquik did for flapjacks: took a proven recipe, packaged it with easy-to-follow instructions and left a little room for imagination and hands-on work.
Voila — successful, delicious, expected results.
Comparing franchising to Bisquik is a bit of an over simplification, but there are definite similarities. Like Bisquik, when you buy a franchise you’re buying a “recipe for success” based on proven results (at least that’s the idea). Just follow the simple directions step by step and reap the rewards.
This doesn’t guarantee success but your potential as a franchisee is greatly enhanced by a strong franchise system.
So how do you tell a strong franchise system from a weak one?
The best place to start is with existing franchisees:
- Are they established?
- Are they happy with company support and training?
- Are they making money?
- Would they do it again?
- Did the franchise meet their expectations?
- Most importantly, are your expectations similar?
Happy franchisees who are making money are strong signs of a healthy franchise system. Anything less should be a big, red flag.
When talking to franchisees, ask them what their daily responsibilities are – what do they do every day? It’s important to know that you could stumble upon a very healthy franchise system, but if the daily routines of the average franchisee aren’t how you want to spend your days, you’ll likely fail.
It’s important to be honest with yourself, know your skills and limitations and truly understand what you’re looking for out of business ownership.
On a final note, don’t be alarmed or discouraged by some negative feedback from franchisees. No franchise is perfect and every system has its top, average and bottom performers, as well as some failures. The important thing is to identify if it’s an isolated problem or a system-wide issue, and how it’s being addressed.
Franchisees fail for one of three primary reasons: under-capitalization, a flawed franchise system or not following the program.
It’s pretty easy to estimate how much money you’ll need to fund your new franchise. It’s also fairly easy to spot franchise systems with flawed or unproven business models.
The only open question is, “Will you follow the program?” If so, then buying a franchise is probably a good option.