Gaining Critical Insight from Other Franchise Owners is an Important Part of the Franchise Discovery Process
Franchising presents a promising avenue for entering a business with an established model. With more than 800,000 franchises in the U.S. alone, it’s clear that more and more people are finding success as franchise business owners. But how do you know if a particular franchise is right for you?
One essential element of exploring franchise opportunities is the validation process. This phase allows you to engage with current franchisees to gain insights about the business. To navigate this process effectively, consider asking specific questions and employing certain strategies.
1. How Involved are You on a Day-to-Day Basis?
This is an important question since there are three models of franchise ownership: owner/operator, semi-passive and passive. You want to speak with owners who match the model you are pursuing so you can ask questions that align with that role.
2. Do You Collaborate with Other Franchisees in the System or Your Region?
One of the reasons to invest in a franchise is the built-in camaraderie with the other owners. You want to be in a system that fosters that type of culture so you can take full advantage of sharing best practices from other owners and learn from their successes and mistakes.
3. Have You Consistently Met Your Sales Goals?
We all know that money is the most important topic in a conversation about buying a business, and this allows for a gentler approach. From this point, you can ask about profit margins and cash flow. But this question also helps you understand whether there are peaks and valleys in the business.
4. Would you Choose this Franchise if You Could Do It All Over Again?
This is one of my favorite questions to ask. It’s a “yes” or “no” question and leaves very little wiggle room. If the answer is “no,” take that opportunity to ask why. It could be something personal that has nothing to do with the franchise itself. Or it could be an opportunity to hear something of concern that you were not aware of.
5. Is There Anything You Wish You Knew Before Becoming a Franchise Owner?
The objective of this question is to gain critical insight. A franchise owner may share something that you may or may not have thought of and how they got around a specific obstacle, which will help you avoid making the same mistake.
You should be speaking with five to seven owners per concept, which can become challenging in and of itself. Here are a few tips to keep you on track:
- Be respectful of their time.
- Keep notes with each owner organized so you can go back and ask additional questions if necessary.
- If you hear an answer you do not like, ask the question again to another owner.
- Do not focus only on money. There are many aspects to owning a business.
The Franchise Validation Process
Enter the franchise validation process with realistic expectations, preparing for both positive and negative feedback. Do not assume everything you hear will be rosy. In fact, expect to speak to at least one person who is unhappy with some aspect of their business. That is the reality of franchise ownership. Be wary of those who are overly negative because that may be their overall demeanor. Bear in mind what they are saying, but then balance it against other opinions to avoid biases.
“The logic of validation allows us to move between the two limits of dogmatism and skepticism.” – Paul Ricoeur
