Sometimes the perfect franchise opportunity for you to buy isn’t the most obvious franchise, the most popular franchise, or the trendiest franchise.
Sometimes the perfect franchise for you to buy is a lesser-known franchise opportunity in an obscure industry. Or it may be in a mainstream industry, but it’s not (yet) a glamorous franchise brand. It may even be a new franchise opportunity.
These franchise businesses are not considered the “hot” opportunities, but they are moneymakers. Be careful that you don’t miss them!
What’s your perfect franchise?
Franchise prospects often don’t think to ask, “Which franchise makes the most sense for me?” because they are more concerned about buying the “hot” franchise opportunity.
And while there’s nothing wrong with “hot” franchise opportunities, you can easily get burned buying any franchise that’s not the best franchise opportunity for you.
Every franchise opportunity requires different skills, and it’s easy to tell which franchisees were sold a franchise even though they did not possess the appropriate skills. Those franchisees almost always end up in the bottom half of their franchisor’s “franchisee performance” list because they are not cut out to excel in the business.
Of course, these franchisees are almost always tagged as “complainers,” too. They complain because they invested hard-earned money that they’ve either already lost or will lose, again because they cannot excel in the business.
Got what it takes to be a franchisee?
Before you buy a franchise, it’s critically important to look at franchise opportunities in terms of how well you can meet their operational expectations. It doesn’t mean you’re any less of a franchise prospect, or that the franchise brand is inferior, if you decide the franchise opportunity is not for you. It simply means that you’re better suited for a different franchise business. That is, the perfect franchise opportunity for you.
Most franchisors know this to be true, but it doesn’t mean all franchisors follow it. Many franchisors are too eager to sell franchises, and that results in “complainers.” You’ve got to protect yourself. Don’t let anyone talk you into buying a franchise until you have verified that you are compatible with the franchise operationally.
The challenge is even more difficult because most franchise buyers look at only a small number of franchise opportunities before they buy one. A year or three later, when they discover the franchise business that they should have purchased, they say, “If only I had known . . . .”
7 steps to help you find your perfect franchise
Before you buy a franchise, make sure you know what’s available to buy. Here are seven ways to help you do that:
- Come to terms with your skills, interests, values and behavioral style. Few franchise prospects begin here, but if more would we’d have fewer complainers in franchising, and less money lost! Armed with this knowledge, you can reduce the number of franchise opportunities to consider because you won’t qualify to buy every franchise. No one is qualified to buy every franchise.
- Ask franchisors: “What do your top three franchisees have in common?” Sadly, most franchisors will not be able to accurately answer that question off the cuff. That’s because no one asks that question, and because most franchisors haven’t considered the information to be important. But what’s more important? If your skills, interests, values and behavior style do not match up with the top three performers in the franchise network, why would you want to invest your money in that opportunity? If you do invest, at least you’ll buy a franchise with your eyes wide open knowing that you will not be in the top echelon of franchisee performance.
- Consider the unglamorous franchise opportunities. You’ll have to dig to find these franchise brands because they don’t get the attention of popular media. Business-to-business services, cleaning, childcare, auto repair, adult care, and education – franchise opportunities in these categories are often overlooked, even though they are stable, money-making businesses. Many people who buy trendy or “hot” franchise opportunities eventually wish they had not simply because there were better opportunities for them. However, people who buy franchises that meet their personal requirements, even if they’re not popular franchise brands, are often the happiest franchisees.
- Forget about your experience. “I don’t know anything about that business,” may be a very good reason to buy a franchise that provides that business. You may be surprised to know that franchisors aren’t looking at you for your work experience. That’s because they’ve learned that the person with experience in their business is often the worst franchisee. People with experience operating a particular business have often developed bad habits that are nearly impossible to break. Keep an open mind. Don’t judge the business before you’ve considered it. I know successful franchisees in many blue-collar businesses, and they do not spend their days doing blue-collar work. There’s nothing wrong with blue-collar work, but it’s not what most franchisees want to do. Good blue-collar businesses often require white-collar owners who hire the blue-collar staff. By the way, it’s only a hunch on my part, but I bet blue-collar employees are happier working for franchisees than for corporate owned or non-franchised businesses.
- As good as your franchise broker may be, he or she isn’t going to tell you about all franchise opportunities. And you shouldn’t expect them to. Most brokers will not charge you a fee, and that’s a good thing. But they’ve got to make a fee because they invest huge amounts of time into helping their clients buy franchises. Of course, the franchisor pays the broker’s fee in your behalf, after you pay the upfront franchise fee. (In a way, you actually do pay the broker’s fee, but that’s another topic for another time). It’s a good idea to work with franchise brokers, but it may not be the first step you should take in your pursuit of buying a franchise. Better that you first know at least the kind of franchise you want to buy, if not a specific industry or brand.
- Invest your time searching for franchise opportunities, including lesser- known opportunities. You can find them online and off-line. Look for new brands in strip centers, office complexes, and industrial zones. The perfect franchise for you may have yet to open in your city, but when it does you may have to move to buy one. You’ll also find new and existing opportunities on franchise portals, such as FranchiseExpo.com and Franchise.org. And one of the best ways to get a close look at dozens of franchise opportunities is by attending franchise expos.
- Don’t say no to a franchise opportunity simply because you’d be one of the first franchisees. Someone was the first to buy a McDonald’s, a Midas Muffler, and a Subway franchise. Franchisors struggle to find their first dozen franchisees because most franchise buyers want to invest in a business where there are numerous existing franchisees. Nothing wrong with that, unless it’s the wrong franchise for you to buy. Keep in mind that the vast majority of franchise brands worldwide support fewer than 100 franchisees. Find the franchise opportunity that’s the best fit for you and don’t worry as much about the number of existing franchisees. Yes, of course you must ask questions and complete your due diligence before buying any franchise, but you can also use what’s perceived as your disadvantage to your advantage. Many franchisors discount fees, including royalties, for their first several franchisees.
Even if a franchise business isn’t touted as glamorous, trendy, or “hot”, don’t say no to that business without doing some exploration.
Franchisees are meant to be happy
Ultimately, you want a business that satisfies your personal needs. You have natural as well as developed skills and talents. You know what makes you happy, and you have every reason to expect your franchise of choice to make you happy. It will, if you buy the right one!
And there’s a very good chance that the perfect franchise for you is right under your radar. Finding it requires that you broaden your scope. Follow my seven steps and you may be surprised to discover that there’s more than one perfect franchise for you.
Dr. John Hayes does not sell franchises, but he helps franchise prospects discover franchise opportunities that make sense for them operationally and financially. Add your name to his list for a variety of valuable information.
This post was written by John Hayes