Overview – How to Conduct Effective Franchise Research

Overview - How to Conduct Effective Franchise Research

You are about to enter into a task of researching business opportunities, where the outcome will likely have a profound impact on your future. Some people enter into this research process and realize that entrepreneurship isn’t right for them, or at least not just yet, and so continue with their corporate career paths. Many others though proceed to buy a franchise. Some succeed, while others get into a lot of trouble and eventually fail. One of the biggest determinants of your success will be how well you conduct your research, BEFORE you buy your business. People who rush in and just do cursory research often fail because they didn’t realize all the complexities of the system, or of their roles, responsibilities and obligations. Only when you conduct thorough and effective research, will you know ahead of time how and why the business works, as well as how and why the business fits your skills, capabilities and ideal business model. The hard part is how to do this research and what to ask…

One thing we can guarantee as you participate in this process is this – expect to get scared! Fear is normal, and when utilized properly can become a very effective catalyst in helping you complete your research. Many people become overwhelmed because they don’t know what questions to ask, or to whom they should be asking the questions, and so they stop their investigation prematurely, sometimes even before ever getting started. In order that this doesn’t happen to you, and so that you get the information you need to make the best decisions for you and your family, we’ve simplified this process for you by providing a detailed list of questions in our Q&A section. Fear and skepticism usually get reduced incrementally, as you get answers to your many questions.

You have one primary focus – to make your decisions based on facts, not perceptions (in other words, talk to enough people until you’re hearing the same things over and over). Because they experience some negative answers during the process, many people abandon their research prematurely and pass up on the very opportunity that could have enabled them to realize their dreams – they just didn’t talk to enough people to get to the positive answers! Fear, doubt and skepticism become your best friends in getting to the facts throughout your research process because they create questions in your mind. It is only when you ask these questions of enough people within the franchise system (both the franchisor’s staff and the existing franchisees) that you become better educated about how strongly the franchise concept fits (or doesn’t fit) your ideal business model. When you think about it, the franchisor’s and/or existing franchisees’ answers to your questions can only have one of three effects:

  1. No effect – you’re just as doubtful and skeptical as before
  2. Negative effect – you’re even more doubtful – if this trend continues, close the file!
  3. Positive effect – incrementally, as you hear more and more positive answers, your doubt and skepticism will subside, and eventually be replaced with building excitement.

The reality is that as you talk with several different people within the system, you’ll likely experience all of the above and as a result face some type of “tug of war” feelings as you hear both positive and negative answers. You’ll also be torn between two paths – a logic path (data, hard facts, process components, etc), and an emotional path (“I really like this business”, “it’s fun” – or conversely “I don’t know enough so I’m scared”, etc). Most people buy emotionally and justify logically thereafter, so it’s your job to separate the two paths and analyze them independently. If the business is right for you, these two paths will eventually converge as you come close to completing your research.

We offer you this strong caution – do not allow yourself to be sold (or unsold) by anyone else. Rely solely on your own research and only make a decision to proceed – only when you can justify how and why this business meets your criteria and why you know why you will be successful at running it (or to eliminate the opportunity when you can logically identify why it’s not right for you).

Jun 24, 2014