Doing Your Due Diligence

If you are considering buying a franchise in 2023, there are a few things I’d suggest you do first.?

The first one is due diligence. I find that sometimes when people have bought a franchise, especially when they didn’t use my services, they really didn't dig in and do the due diligence to the extent that they need to.?

What does due diligence entail??

1. Talk to the franchise brand.

The first step is being able to talk to the franchisor. When you work with me, I’ll introduce you to a several franchise brands that match your business model that we develop together. Keep in mind, that many of the representatives you speak with who are representing the franchise, are focused on developing the brand and may not be there once you buy the franchise.? So don’t make assumptions -? good or bad - based on the franchise representative.

When you talk to the franchise brand rep,? it’s a little like when you're buying a new car.? You see the brochure, website and videos with all the features and benefits. You’re going to learn about the business model and how the business is doing from the management perspective. Because it comes from the franchise, you know they’re going to put their best foot forward.

2. Validate with Owners

While it’s important to talk to the franchisor, the next step you will want to take is to validate with the owners. This is one of the most important steps in the validation process. At times, the franchise arranges group calls or gives you recordings from past group calls with franchise owners. Other times, you’ll get a list of franchisees to talk to. You’ll be amazed at how much you can learn from speaking with the franchisees/owners within the franchise system.?

When I was in the corporate office for FranNet, I was able to validate with franchisees. You would be shocked at how much information that they will provide. Most won’t sugarcoat their thoughts. You’ll be able to learn what it’s like to actually own one of these businesses.? Note: that this is a great time to get more specific financial information from the franchisees such as how long it took to be at operational break even? How did they do year one? Year two? Year three, and so on. And always, always, always ask the franchisee if they would buy the franchise again based on what they know now.

3. Follow the process

I encourage my clients to always follow the process the franchise has outlined and make the calls to the franchisees they gave you. Why? So I advise clients to first,? follow the process that the franchise has outlined. However, clients should keep in mind they have access to all the franchisees names and contact information when they get the Franchise Disclosure Document (FDD). I encourage clients to ask the franchise if they can speak not only with top performers, but also with middle performers and poor performers to get a good view of the franchise.?

Before you buy, make sure you do your due diligence. This is just scratching the surface on what you need to do to vet the franchise.? Keep an eye out for more about this topic and other franchise tips and strategies.?

If you are interested in finding out more, working with me, please scan over the QR code below or click this link https://integration.frannetsecure.com/workshop/ccward to get started. Keep in mind that my services are always at no cost to you because I get paid by the franchise, just like in an executive recruiter model. Rather than helping you find a job, I'm helping you find a franchise. I look forward to working with you.