To properly evaluate franchise opportunities, it’s important to have a clear understanding of what support to expect from the franchisor. This will help distinguish between high-quality franchisors and those to avoid. While the level of support will vary depending on the industry, there are a few common areas to anticipate.
Firstly, franchisors should provide help with site selection for any business that requires a physical location. This can include on-site reviews and lease negotiations, or simply providing guidelines on finding and evaluating a site.
After a site is selected and approved, the franchisor should offer build-out assistance. This involves providing detailed instructions on equipment and decor components, along with a list of sources for each. More involved franchisors may even offer direct ordering assistance.
Marketing support is another key area where franchisors should provide guidance. A complete marketing and advertising plan should be supplied, covering at least the first three to six months of operation. This should specify timing, sequence, and content of promotional material, and costs for every action outlined in the plan.
In addition to a marketing plan, franchisors may provide access to marketing materials and resources such as templates for flyers, brochures, and advertisements. They may also offer guidance on developing local marketing strategies and tactics.
Some franchisors provide direct assistance with advertising and promotional activities. This can involve the franchisor booking advertising for the new franchisee, to make sure all areas are covered.
Initial training is essential to ensure that new franchisees can competently run the business from day one. This training should cover all aspects of operating the business in detail, including recruiting and retaining employees, back-office bookkeeping, and administrative tasks. The franchisor should also provide written reference materials such as instructional manuals.
It’s important to fully understand the types and degree of support the franchisor will be providing before entering any franchise system. When speaking to current franchisees during due diligence, ask about the franchisor’s effectiveness in providing support. Also, ensure that the expected support is specified in the franchise agreement.
