Franchise Buyers’ Important Steps to Evaluating a Franchisor

As published on Entrepreneur.com, in an excerpt from his book, The Franchisee Handbook: Everything You Need to Know About Buying a Franchise, iFranchise Group CEO Mark Siebert provides detailed guidance to franchise buyers, as they evaluate a particular franchisor and its franchise opportunity.

Siebert notes that franchisees and franchisors should be collaborators, building a relationship that benefits both financially, and with both parties on equal footing. This means that a potential franchisee need not feel intimidated by the franchisor during the sales process.

Assuming the prospective franchisee has already done basic due diligence, read the Franchise Disclosure Document (FDD), interacted with the franchisor’s sales team, and talked to other franchisees, there are additional important steps that should be taken during the sales process.

These steps include:

• Ensuring that the process is more aligned with the “award” of a franchise, versus the “sale” of one
• Trusting the sales team, but also validating all information provided
• Looking for any “red flags” during the process: promising certain financial results, recommending conversations only with select franchisees, or other high-pressure or evasive tactics
• Meeting the franchisor team, both virtually and in person (ideally at a Discovery Day that includes ample time for office tours, site visits, Q&A, etc.)
• Evaluating how well data and best practices are gathered and shared across the franchise system
• Considering a “trial run” by working for a short time within a franchise operation, when feasible
• Not rushing to make a final decision

NOTE: These are just some of the valuable pieces of advice that Siebert covers in this excerpt and in the book. For additional details and recommendations, read the article and obtain a copy of the full version of Siebert’s book, which can be purchased at the following sites:  Amazon | Apple Books | IndieBound