There are numerous books, articles and blogs that provide advice on how to evaluate a franchise opportunity. A common thread that runs through is the recommendation that before a prospective franchisee invests they must review and validate the information disclosed in the Franchise Disclosure Document and obtain feedback from franchisees. This approach is an effective way to evaluate a franchise and when coupled with the assistance of professional advice can be an effective way to evaluate and protect your franchise investment. However, to complement this approach I would advise prospective franchisees to dig deeper into the franchise and gather more information.
Looking beneath the surface
When evaluating a franchise opportunity, it’s important to get as much facts as possible. In most cases this means digging deeper.
When it comes to franchising, Murphy’s Law comes into play more often than desired. In many cases, a new franchise takes off slower than anticipated.
When franchisors strategize their system growth, the major focus is placed on the amount and quality of their franchisee leads.
In the franchise industry, franchisors can view comparisons and relationships between consumer satisfaction for the products or services a franchise offers.
In a recent study by the research team at Franchise Grade has indicated that 71% of franchise systems have 100 or fewer franchise units.
A good consumer experience is not a reason to invest in a franchise. It skews the decision-making process of a prospective franchisee from start to finish.