Sunday, March 19, 2006

Will They "Just Say No?"

Buying a franchise is typically the most critical decision you'll make in your work life. While it's an exciting time, and you and your family are right to be enthusiastic about your future as they small business owner, be sure you don't let your "heart overrule your head."

When you start zeroing in on a franchise system that is appealing to you, many of your supporters will cheer you on. Often, your wife, parents, and friends will pick up on your enthusiasm-helping you gain confidence that you're headed in the right direction.

In most instances, the franchisor's sales team will be the most excited to learn of your interest.

Naturally, they have a financial interest in seeing you join the team. Many of them are unable to "Just Say No." Many take the approach that, if you have the money, you should be allowed to buy their franchise opportunity.

At this stage of your investigation, it's critical that you begin to evaluate your primary concerns. Do you feel that you could be undercapitalized? Are you unsure if you'll excell at your new job description? Are you concerned that the ramp up to profitability will be too long? Are you worried about the strength of competition in your marketplace?

While you're "friends and family" team may encourage you, it's critical that you press your advisors and the franchise management team with your concerns. A good franchise system will usually allow a prospect to speak directly to the Field Representative who will be your day-to-day mentor when you open your unit. This individual has his finger on the pulse of the franchisees in his region and probably does not want an underperforming unit in his area.

Anyone who shows concern about your potential success should not be discounted. He or she may well save you from a difficult financial future.

A good franchisor will regularly disappoint buyers by saying; "Sorry, but you are undercapitalized," "Sorry, you don't have enough experience at this time," "Sorry, our concept won't work in your home town."

In speaking with the salesman and your field representative, you should bluntly ask how often they deny a franchisee the right to buy into their system. Ask them of the most common cause.

Closely evaluate your own situation and feel comfortable if you're moving ahead with a franchisor that is wise enough to "cull" weak franchisees from the buying process-long before they joined network. In fact, The Franchise Doctor believes this to be one of the greatest advantages of joining a franchise system-having someone tell you the bad news that you may be too blind, or inexperienced, to see for yourself.

For more insights into the franchise buying process read "Why Buy a Franchise" on our web site. Also, be sure to review The Franchise Doctor's Recommended Systems.