The correct way to choose, research and potentially buy a franchise can be likened to running a 10,000-meter race (which equals 6.2137 miles), in which it's imperative to pace yourself if you want to have any chance of winning.
That's because investigating franchise opportunities-doing all the things needed to get the facts, is a week-by-week process. It's not work you should run through as if you are an Olympian participating in the 100-meter dash.
There are several very specific tasks you'll be doing to accomplish your goal of finding and ultimately purchasing a franchise that meets your criteria. Here is how to make it to the finish line as a winner:
The First 1,000 Meters
The beginning of the race is where you have to make sure your feet are properly positioned in the starting blocks. You need to have the best start possible.
To begin, you need to make sure you're ready-or at least mostly ready, to become an owner if you find the right opportunity. Decide if you're “just looking” or if you're looking to become your own boss.
At 2,000 Meters
You need to have a good understanding of the actual franchise business model before you start seriously looking for a franchise to buy. The Small Business Administration (SBA) has an online training course that's helpful and convenient for those interesting in learning about franchising.
At 3,000-4000 Meters
This is where you'll do an inventory of sorts. A self-inventory.
The first thing you need to do is take a hard look at your life up to now with regard to rule-following. Have you followed the rules where you've been employed? If so, great. You should fit right in as the owner of a franchise since franchising is chock full of rules. If you are not good at following rules, you need to take a step back and really think your franchise ownership idea through.
Next, do a skills inventory. What do you excel at? What are your weaknesses? The trick is to find a franchise that allows you to put your best foot forward. A franchise is a great fit for your best skills.
At 5,000 Meters
You need to determine your financial standing, specifically your net worth, so you can target franchises that are affordable. Once you've done that, come up with a figure that's at the top-end of your investment comfort level and try to stay below it.
At 6,000-7,000 meters
You're now more than halfway through. It's time to look for franchise opportunities.
Choose two or thee franchise opportunity websites, and search for franchises that meet your budget and match up with your skills. You should be able to come up with a good list of potential franchises. Drill down to the ones you can visualize yourself owning, and contact them for more information.
At 8,000 Meters
This is when you'll dig in and find out lots of information about the franchises you're interested in.
You'll talk in-depth with franchise reps to get pertinent details about the opportunities. If you like what you hear, you'll contact existing franchisees to ask them questions about their businesses, including their revenue. I encourage you to visit one or two franchisees in-person, too, so you can see the business in action.
At 9,000 Meters
If you're going to need a small business loan for the franchise business you've chosen as this stage when you'll be talking to lenders and applying for a loan.
You'll also be looking at the legal documents the franchisor has sent you to review. You'll need to hire a competent franchise attorney to help you navigate pages and pages of legalese, so you have a complete understanding of your obligations as a franchisee. (The franchisor has obligations to you, too.)
At 10,000 Meters
There's something you may be asked to do before you cross the finish line in what's been a fairly long process; visit franchise headquarters.
Known as a “Discovery Day,” a headquarters visit is usually reserved for the most serious franchise candidates. It's essentially a meet and greet.
The franchise executives and staff want to meet you and see if you're a good fit for the franchise opportunity.
For you, a face-to-face visit is the best way to see if the company is up to snuff.
After your visit, it's time to cross the finish line.
The finish line can be a yes–you'll buy the franchise, or a no, you've decided not to pursue it. Either choice is okay.
You can always run another race.
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