As an aspiring franchisee, your move to join a franchise corporation might be one of the most exciting decisions you make in your life — and also one of the most significant.
Before you jump right in, it’s worth noting that buying into a franchise requires some serious consideration.
So before you contractually and financially commit to the franchise you’re interested in, it’s important to get a strong understanding and feel for the company and how it operates.
Not sure where to start? From the initial research stages all the way through Discovery Day, here’s everything you should check off your list before you sign the dotted line.
Do your own research
In addition to relying on the information supplied by the franchise corporation, you should research the brand on your own.
You can typically find the company’s mission and vision statements on its website. You may also find information about the company’s founding and evolution over time, as well as any key milestones or accomplishments. Some companies even have public-facing promotional or training videos that can give you greater insight into the company’s culture, operations and values.
Look through the franchise’s website, social media accounts and mentions in news articles or press releases. All of this information will help determine if the franchise is right for you.
Attend a Discovery Day and ask a lot of questions
As you get further into the franchising process, you might have the chance to attend a Discovery Day. These opportunities are designed to give potential franchisees a better understanding of a franchise’s business model and what it takes to be successful with the brand.
Whether in person or hosted virtually, this is an excellent chance to meet with the franchisor and learn more about the company, its operations and its leadership team. Make sure to ask plenty of questions and network with other franchisees to get a good feel for the company.
Need an idea of questions to ask the franchisor while attending Discovery Day? Try starting with the following:
- What ongoing support and resources do you provide to franchisees?
- What are the costs, both initial and recurring, associated with becoming a franchisee?
- What are the requirements for becoming a franchisee?
- What are the expectations and performance metrics for franchisees?
- What is the company’s growth strategy?
- What level of responsibility does a franchisee have regarding advertising and marketing?
- How much operational control does a franchisee have?
Related: 23 Questions to Ask a Franchisor When You Meet Face to Face
Review the Franchise Disclosure Document
The Franchise Disclosure Document (FDD) is a legal document that outlines pertinent information about the franchise company, including the fees, costs and obligations associated with being a franchisee.
The franchisor is required by law to provide you with an FDD at least 14 days before you sign any agreement or invest any money. It’s important to review the FDD carefully and ask questions about any terms or requirements you don’t understand. Because of its complexity, the FDD is best reviewed with a legal representative of your choosing.
Related: Considering franchise ownership? Get started now and take this quiz to find your personalized list of franchises that match your lifestyle, interests and budget.
Speak with current franchisees
Speaking with current franchisees is one of the best ways to get a feel for a franchise. Don’t be shy! You can ask them about their experiences and challenges, plus for advice they have for new franchisees like yourself.
This is a great way to get an insider’s perspective on the business — information you can’t find anywhere else to determine if the opportunity is right for you.
Related: Is Franchising Right For You? Ask Yourself These 9 Questions to Find Out.
Visit other franchise locations
In addition to attending a Discovery Day and speaking with current franchisees, visiting locations in other cities or states can be an excellent way to get a sense of the franchise brand.
Use your visits as an opportunity to see the business in action and get a better understanding of how it operates in different markets.
For a complete picture, be sure to visit at different times of day as business operations change. For instance, think of lunch and dinner rush times in food-service franchises.
Reputation matters
It’s also critical to consider the franchisor’s reputation in the industry. Is the franchise well-respected and recognized for its achievements by receiving awards and accolades? Or has the brand received negative press?
Researching the franchisor’s reputation can give you a sense of how others perceive it. The best franchises have a good reputation and track record.
Move forward only if the opportunity feels right
Joining a franchise can be a great, life-changing opportunity — but it’s important to do your due diligence before committing. Research the company, attend a Discovery Day, review the FDD, speak with current franchisees and visit other locations.
Ask as many questions as you need to about support, costs, requirements, expectations and operational strategy. With a better understanding of the franchise, you can make the right decision and continue your pursuit of becoming a franchisee.
Related: 10 Tips to Go From Employee to Boss, From Franchisees Who Did It