Tips to make the best of your franchise opportunities research
Nicholas J Hudson| National Franchise Manager | Snap-on Tools
When we think of the term 'research' we often envision a tiresome process of reading endless pages with tiny font and an overwhelming feeling of fatigue strong enough to make you want to throw those mountains of research materials up in the air.
With hundreds of franchises to explore, researching is a fundamental step in the process of buying into a franchise. Selecting the one that matches your expectations, your interests, your lifestyle commitments and – why not? – your personality is not an easy task.
Nick Hudson, National Franchise Manager for Snap-on Tools, shared with us some insights on how to efficiently perform franchise opportunities research.
When seeking franchise opportunities, you will come across a multitude of business opportunities all looking potentially successful. There is probably no such thing as the "right" channel for information; it's more a combination of different sources and selecting what is ultimately relevant for your goals.
In particular, the process of doing the due diligence on a franchise system is more a matter of knowing where to look and what you should be looking for.
Take a company’s website for example. It’s the quickest way to get your head around and explore a franchise system you’re interested in.
It is the first point of contact between the prospective franchisee and the franchisor when researching franchise opportunities and therefore it should be perceived as a window on the company’s products, business model and team philosophy.
An example can easily prove the importance of having a website up to date with all the relevant information about franchise opportunities: some time ago, we advertised a 1800 number for people to call if they were interested in the Snap-on Tools franchise. As a result, people rather than calling the number, redirected their interest to the website, which saw a significant increase of enquiries: this example proved just how the website is considered as the starting point of the research process.
The amount of information you can retrieve from a company’s website can offer a preliminary assessment of the franchise system you’re looking at: this can give you a first understanding of the company transparency policy as well as their willingness to assist you in the long run.
Look also at the nature of the information provided on the website and see if these are covering off key points that are relevant to your expectations.
For example, is the website providing information on training programs before the beginning of the operations? Is there enough information about ongoing support and assistance in selecting the right location, negotiating the lease and the necessary financing or managing employees? What kind of marketing programs are in place to create your customers’ base? Did the company receive any kind of awards in the past years for an outstanding achievement in a particular area?
And finally, try to evaluate what it takes to succeed in that particular franchise and what kind of financial reward you can gain and compare it to your financial expectations.
Researching franchise opportunities doesn’t need to be a drawn out process and sometimes the best information can be found through the simplest channels such as the franchise website.
However, this can give you only a preliminary understanding of a franchise business, that’s why I recommend expanding your research of franchise opportunities through other avenues.
"Researching franchise opportunities doesn’t need to be a drawn out process and sometimes the best information can be found through the simplest channels such as the franchise website."
The next step of your research should be talking to the people involved on a daily basis in the franchise business. Talk at length with the franchisor; ask customers, but more importantly ask existing franchisees. Who better than people who are currently running a franchise to help you understand all the different facets of the business operations? Never be afraid to exploit these extra information sources as they will help you to confirm and verify the information coming from the franchisor.
I could spend hours giving you information about a franchise system yet none of it would compare to the amount of knowledge and information gained if you went out and got some hands on experience.
For this reason, here at Snap-on Tools we host a mandatory ‘Ride-along’ program for prospective franchisees that are seriously looking into our franchise system. This program is run over three days where the prospective franchisee ‘rides along’ with existing franchisees as they call on and service their customers in their Snap-on Tools mobile store.
This provides a matchless opportunity for the prospective franchisee to get a feel for the types of tasks they will undertake on a day-to-day basis and therefore decide if this franchise system is suitable for them. It is also an opportunity to ask any questions you may have with a real professional to validate the information you’ve gained so far through a second source.
In conclusion, buying into a franchise can be a great investment but it is necessary to do a lot of due diligence before committing to an investment that will definitely impact your life. Ensure you explore as many source of information as possible to test the claims of the franchisor so you don't get caught by the unknowns after signing on the dotted line.