Wednesday, February 09, 2005

Finding a Dedicated Franchisor

As most of you know, The Franchise Doctor works with many successful businesses to develop their franchise programs. We help them decide what services to offer their franchisees and how much to charge those who join the system. We guide them through preparation of their Uniform Franchise Offering Circular (UFOC), their Franchise License (or contract) and spend hours formalizing their training manuals. This process usually takes 90 to 180 days and helps us really get to know our clients and their franchise opportunity.

I recently got a call from a local entrepreneur who's running a successful company and wanted to explore franchising his concept. When we met, I became enthusiastic when I learned that many of the critical factors we seek in a successful concept were present. The company had several years of profitability and good cash reserves. The franchisee can be home-based; requires less than $20,000 of equipment to get started; targets a large group of businesses; and the system
can be taught in a week-long training class.

After a couple hours exploring how we could work together to develop a great franchise system, the owner stated, "I don't want to work that hard. I'd rather just train a bunch of people & let them sort it out. I don't want to be responsible for their ongoing support."

It seems he'd run another company for many years and sold out with enough money to retire. Instead, he began his present company and built another successful venture. Now his financial security allows him to take time off for travel several times a year. He doesn't have the passion to be a mentor for dozens of new franchisees who are just beginning their companies.

I applauded his frankness and told him he should not try to get into franchising unless he's prepared to dedicate himself and his resources to the success of his franchisees.

While this is an unusual response from someone who called me regarding franchising, I wonder how many fledgling franchise systems are led by someone lacking the drive and energy to grow a system to 20, 50, 100 and more franchisees.

When you're searching for your franchise partner, be sure you closely evaluate the principals' dedication to mentoring you for the next 10 years. In most systems, you'll have an opportunity to talk directly to the President or Chief Operating Officer before you sign your license. Ask them their plans for the company for the next 10 years and be sure you get the commitment you demand before you join.

For additional details on how to evaluate a franchise system, check this article on our website: How to Evaluate a Franchise System.