IT’S A PHOTO FINISH!

How do you choose between two favourites? Top tips on making the final decision.

Choosing a franchise: how do you pick the winner?

Two franchising experts share their views on picking the best franchise for you.

THE BETTER BRAND

Which brand has the best reputation? This isn’t only about which brand has a high trust rating, but which brand resonates best with the demographic you are going to target. Is the brand static and no longer evolving, or is it continuing to build its strength?

THE BETTER PRODUCT OR SERVICE

Look carefully at the product or service. Yes, it’s going gangbusters now, but which franchise has the better track record for innovation? Which one has a clear commitment to research and development of products and services? Who has a schedule for the introduction of upgrades, new products, unique services?

Ask about the cost of planned upgrades. Ask about supply chains, guaranteed availability of what you need to carry out your business. What about cost increases to products? Are they tied to CPI, value of the dollar against other currencies, or is there no formula? What about increases in franchise fees and corporate marketing levies? How are they calculated?

THE BETTER SUPPORT

This is the big one. You need to be able to concentrate on your core business without being weighed down by having to write workplace safety manuals, systems, policies and procedures, HR and so on. You need to be able to log on to an intranet and it’s all there for you. You need confidence that the franchise will provide you with all the tools to keep you legally compliant.

THE BETTER SUPPORT TEAM

Spend as much time as you can meeting with and talking to the head office support team. The field coach will be the person you will rely on initially, so see if you can get that person to meet you in a cafe or for lunch. A more relaxed environment will allow you to build better rapport and make better judgements about the calibre of the person.

THE BETTER MARKETING PLAN

Part of the assistance you receive from the franchisor should be robust marketing support. This should include a program of guaranteed marketing to promote the brand broadly, as well as lead-generation programs, local area marketing, and social media advice and content.

THE BETTER ENDORSEMENT FROM PEOPLE WHO KNOW

This is the time when you need to evaluate what they do, rather than what they say. Yes, you’ve had slick presentations, visions of success drawn for you. But words are cheap.

What is the support like behind the glittery promises? Talk to current franchisees. Walk in and introduce yourself and ask if they can spare some time to talk to you. Track down franchisees who have left the group and try to spend some time with them to find out why they left.

Be fair in your evaluation of their complaints. If alarm bells ring, ask the franchisor what happened. There are always two sides to a story and it’s important to hear them both before you judge.

THE BETTER FIT WITH YOUR PASSION

Passion is the essential ingredient in running a successful business, so having a passion for the product or service you will be providing is really important. Which of your potential franchisors has the product or service that really resonates with you, that you can believe in and get excited about?

THE BETTER CHOICE

Once you’ve done as much research and fact-checking as you can, there is usually a clear choice, a franchise whose offering is obviously better. However, if it’s still a toss-up as to which franchise to choose, then you are in a pretty good position. You’ve reassured yourself that you have a good chance of business success with either franchise.

FRANCHISE FEES

When considering a franchise, it is important to compare on an equal playing field when it comes to dollars – so this involves asking lots of questions about fee structures, what’s included and what’s not.

One of the first pieces of information to understand is exactly what the franchise fees are. Are they based on a percentage (therefore they grow with your business)? Or are they fixed (i.e. no matter how well your business is doing the fee will be the same)? It is also worth asking what the fees include. Do they include marketing? What about training? And always ask if there are any other ongoing fees involved. This should allow you to do a fair comparison across the options you are looking at.

OPENING COSTS

One of the most common questions from potential franchisees is understandably, “How much does it cost?” The answer to this general question can be presented in many ways. The specific question you should be asking is, “What is the total initial investment?”

The answer to this question should help you understand what the true cost of the opening is. You should be provided with a detailed cost breakdown so you can compare this to the other options you are considering. Things to consider include: does the figure include equipment, fitout, marketing your opening, any council applications typically needed, and who will assist with opening?

TERRITORY SIZE

Imagine you spend your valuable time researching, decide on a business and put your heart and soul into opening it, only to find out a competitor is opening down the road. Even worse, imagine that competitor is the same brand as yours.

A big part of your questioning should be around territories and fully understanding how they apply. For example, questions to ask include: are the territories exclusive? How are the territories created? What is the minimum population included?

It’s also useful to access any demographic information available about your territory. All of this should be thoroughly examined before you pay a deposit. Also ask the franchisor for a map so you can see the reality of who you can market to, and to make sure no one else from the same brand can open too close to your area.

DO YOU LIKE WHO YOU ARE WORKING WITH?

It might seem like a small thing but working with a franchisor you get along with is extremely important. It is an ongoing business relationship and you should both have similar values and goals. This will create a healthier, more enjoyable process and you can focus on the joys of owning your own business. While looking at the facts and figures, it’s also important to trust your intuition. If you enjoy who you are dealing with initially, it’s also worth asking if you can meet face-toface with members of the support team prior to signing, as this is who you will spend most of your time with once your agreement is underway.

It’s important to take your time to do all the research you feel is necessary before making your final choice. Never feel pressured into making a quick decision. If you’re being made to feel that way, perhaps you need to reconsider if that franchisor is for you!