How To Pick The Right Franchise

Illustrative story: Hector was interested in buying into a restaurant franchise. Given that he had begun work as a busboy and had moved up the ranks to become a manager of a family owned restaurant, he decided that owning his own restaurant franchise would be the next logical step. Hector settled upon one very well known chain and began to do his research.

But Hector was very surprised to learn that everything was not as rosy as it seemed. He spoke with many current franchisees and discovered that many of them were very unhappy with the franchisor. They felt that the franchisor was hard to work with, didn’t follow through, and seldom listened to their ideas.

So Hector kept looking and was even quite surprised when he began to fall for a much smaller, less famous restaurant franchise. Yet the more he dug in, the better he liked what he found. Both his instincts and homework told him that the smaller guy offered a much better opportunity. And he was right. Within ten years, the small chain had grown exponentially, and Hector was there, almost from the beginning; his advice and expertise were actually welcomed and sought out by the franchisor. Hector eventually owned 12 stores in the chain.

So what is the lesson? When looking to buy a franchise, don’t fall in love, don’t get wowed by a fancy brochure and sales pitch. Instead, do your homework. Be cold-hearted about it. Use your left brain. Be logical. Do your research.

Here’s how: With so many franchise systems to choose from, the options can be dizzying. So it is best to start with a global perspective. In the universe of franchising, which industries seem to match your interests? Narrow the choices down to the area you are most interested in, and then analyze your geographic location to see if there is a market for that type of business.

Once you have decided which industry interests you most, and seems to have growth potential in your area, contact all the franchise companies in that field and ask them for information. Any reputable company will be happy to send you information at no cost.

Next, check out your local franchise trade show. They are a terrific way to gather a lot of preliminary information and survey the field in a short period of time (remembering that the companies exhibiting at the show are by no means all of the franchise opportunities available.)

Second, when you do go, you should take full advantage of the information available. Pass by the sellers who are out of your price range or do not meet your personal goals. Have a short list of questions ready for the others

  • What is the total investment required?
  • What is a franchisee’s typical day like?
  • Is financing available?
  • What kind of support can you expect to get?
  • What is their advertising plan?

Finally, the most important thing you can do is talk to current and former franchisees. That is what saved Hector’s fanny. The other franchisees will give you the skinny. They will tell you what it is like to work with this franchisor, how much money you can really expect to make, and what to be on the lookout for.

Narrow your choices down to two or three franchisors, and then get ready to choose the best one.

Steve Strauss

Steve Strauss is the senior small business columnist at USA TODAY, the Editor-in-Chief here at Small Business Connection, a speaker and spokesperson. He can be reached at

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