Selecting the perfect franchise opportunity can feel like a daunting task, but only if you approach it in the wrong way.
That’s why we’ll reveal a clear-cut, four-step method designed to equip you with the knowledge needed to make a confident choice. So let’s dive right into this process so you can be lead down the right path toward your ideal franchise opportunity.
#1: Start With Your Passion
If this is your first time working through identifying the right franchise, you should immediately narrow down your choices based on what you are passionate about! Because here’s the truth that’s most franchisors will be too scared to tell you….
You’re going to have hard days. They will come.
And it’s your passions that will keep pushing you through those difficult moments. When you’re genuinely enthusiastic about your business, it never feels like work. Instead, it becomes a labor of love, an extension of your interests and values.
To kickstart this process, take some time for self-reflection. What activities, hobbies, or causes light a fire within you? What could you talk about for hours on end without getting bored? These are the clues to your true passions.
Once you’ve identified what you are passionate about, immediately eliminate all opportunities that fall outside of this category.
#2: Assess Financials & Closed Store Data
So you narrowed your choices down to your passions, now what?
Well, not all opportunities even within one industry are equal. This is where evaluating the strength of the franchisor comes into play. And the good news is that you can measure this aspect objectively with real numbers. Here are the two key areas you should look at:
Start by digging into the item 19 of the FDD for each franchise you’re considering. Item 19 is where a franchise system will express data regarding how each actively open unit is doing. One metric in particular to look at in this section is AUV (Average Unit Volume). This metric represents on average of much gross revenue each open location does.
Evaluating this metric at each franchise concept you are considering allows you to quickly establish a standard of performance.
Any franchise system that doesn’t have an item 19 is one that you should immediately eliminate from your list because it showcases a lack of transparency and likely indicates poor performance.
Closed Store Percentage
Another key metric to pay close attention to is the closed store percentage. This figure can provide valuable insights into the franchise’s overall success rate. A high closed store percentage might indicate issues within the system, while a low percentage suggests a healthier and more sustainable business model. Take the time to investigate the reasons behind closures, as this can reveal potential pitfalls to avoid.
By thoroughly assessing the financials and closed store percentage of your chosen franchise, you’ll be better equipped to make an informed decision. This data-driven approach will help you secure a franchise that not only aligns with your passion but also has the financial stability and growth potential to ensure long-term success.
#3: Contact Current Franchisees
Getting the inside scoop from those who have walked the path you’re considering can be invaluable. When you’re in the process of selecting a franchise, reaching out to current franchisees is an essential step that can provide you with real-world insights and a firsthand perspective.
Speaking with current franchisees can offer you a wealth of information that you might not find in official documents or promotional materials. These individuals have firsthand experience with the franchise system, and they can provide you with a candid view of what it’s like to operate within it. They can offer insights into the day-to-day operations, support from the franchisor, challenges they’ve faced, and the overall satisfaction they’ve derived from their business.
Some of the key questions you should ask include:
- How has your experience been with the franchisor’s support and training?
- What kind of challenges did you face when starting your franchise, and how did you overcome them?
- Are you satisfied with the level of autonomy and decision-making you have in your business?
- What’s the work-life balance like as a franchisee?
- If you had the opportunity go back in time, would you partner with this brand again?
By reaching out to current franchisees, you’ll gain invaluable insights that can help you make an informed decision. Obviously, in this step you should immediately eliminate options where you consistently hear more negative than positive feedback.
#4: Trust Your Instincts
So you narrowed all of the choices out there down to just your passions. You eliminated franchise opportunities that didn’t measure up on paper. You even removed opportunities that looked good on paper but negative feedback about the franchise experience was consistent throughout all of your conversations with current franchisees.
This leaves 2 or 3 choices left on your list… Now what?
As you progress through the final steps of selecting the right franchise, there’s one crucial element that can’t be found in financial reports or discussions with franchisees—your intuition.
Trusting your instincts is the final piece of the franchise puzzle, the moment when you listen to that inner voice and let it guide your decision-making process.
Some guided questions to ask yourself in this stage include:
- How Consistent Was The Information Presented By The Franchisor With What I Was Told By Current Franchisees? This question prompts you to evaluate the reliability and transparency of the franchisor’s communication. By considering how closely the franchisor’s words align with the real-world experiences and perspectives of current franchisees, you can gauge the accuracy and credibility of the information provided.
- Do I Have Any Doubts About The Character Of The People Within The System I May Potentially Partner With? This question encourages you to trust your instincts and assess your comfort level with the people you’ll be collaborating with. It prompts you to examine whether you perceive honesty, integrity, and a shared sense of values in your potential business partners.
- Can I See Myself Doing This Long-Term? Visualize yourself running the franchise for the long haul. Can you see yourself dedicating time and energy to this business for years to come? If your instincts say “yes,” it’s a positive sign.
Trusting your instincts in the final stages of choosing a franchise can help you find the opportunity that not only makes financial sense but also feels right for you on a personal and emotional level. By weighing your inner compass alongside the data and research you’ve gathered, you’ll be well-prepared to make the best decision for your future as a franchisee.
The Bottom Line
Selecting the right franchise is a journey that demands careful consideration, diligent research, and, ultimately, trust in your instincts. We’ve walked through four essential steps: beginning with your passion, analyzing financials and the closed store percentage, connecting with current franchisees, and embracing your intuition. Each of these steps contributes to a comprehensive and informed decision-making process.
Your franchise choice should not only make financial sense but also resonate with your values and ignite your passion.
Remember, it’s more than just a business; it’s a reflection of who you are and what you aspire to become. Trust the knowledge you’ve gained, but also trust yourself.
By following these steps and balancing logic with intuition, you’ll embark on your franchise journey with the confidence that you’re making a choice that aligns with your dreams and ambitions.
If you are in step one of this process and have identified health and wellness as your passion, then we’d love to invite you to schedule an introductory call with our team to see if navigating a potential partnership together makes sense.