Perfect Match: you and your Franchise Business

I’ve compiled this list of the 10 steps you should follow. This advice is based on the knowledge and experience I have collected from two decades in business, including 5 working for a franchise business and my current role as Franchising Manager for website development and Internet marketing company Bloomtools.

Follow these steps that I have outlined in this article and you will be able to make an informed franchise decision without the stress and confusion.

Step 1 – Conduct your research

Use whatever tools you have at your disposal to find out about the franchise industry. A good place to start is the Internet – read articles and reports from the Franchise Council of Australia, search for advice from franchising experts and browse franchise directories to see what’s available. You should also subscribe to some franchising and small business magazines to get their perspective on the industry. Empower yourself with as much knowledge as possible before you start on your franchise search.

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Step 2 – Know yourself

Before you do anything else, the next step is to take a long, hard look at yourself and why you want to go into franchising. Firstly, brainstorm what you want from a franchise – flexibility? Work from home? A challenge? To work with a strong brand? You also need to honest with yourself about your strengths and weaknesses, your skills and your experience. For examples, if finance isn’t your strong point then you need to make sure you can get adequate financial support from the franchise you choose. It’s important for you to identify these things so you can base your future decision on them.

Step 3 – Assess your financial situation

As well as knowing yourself, it’s essential that you know your financial situation – you need to be realistic about what you can and can’t afford right from the beginning and also the timeframe you need for accessing finance. Figure out how much you can afford then choose your shortlist based on that, rather than choosing the franchises you like, then struggling to scrape together the money – starting off on the back foot will make it really difficult for you to succeed in the long-term. Once you’ve set you’re budget, stick to it! Looking above what you can realistically afford will only cause you more stress and confusion.

Step 4 – Start your search

You’ve equipped yourself with knowledge of the industry and have established your own position, so now it’s time to find some franchise opportunities that you like. The best way to start is to search online directories, because you can conduct searches based on the industry you want to get into and on how much you want to invest. You should also view the websites of the franchises you like to find out more information about them and the opportunity they are offering. Ideally, the website should have a section dedicated to franchising with lots of information, like on the Bloomtools website.

Step 5 – Shortlist your favourites

Next you should create a simple spreadsheet to help you evaluate these franchises and shortlist approximately 3 of them. Put the names of each franchise down the left side of the page and several headings across the top that are important to you, such as ‘professional image’, ‘brand strength’, ‘training offered’ and ‘marketing support’. Then for each franchise, make notes about each area and rate them out of ten. This summary only needs to be very basic to help you get your list down to 3, so you can contact each of these for more information.

Step 5 – Find out more

You will now need more information from the franchises on your shortlist. Make contact with each one and arrange to meet or speak with their Franchising Manager. Prepare a list of questions to ask them to get more details on what you have already ranked them on and to work out whether you will be compatible with them. Many potential franchisees that contact Bloomtools for more information ask questions such as:

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o Who runs Bloomtools?

o What is the target market of Bloomtools?

o How does the Bloomtools franchise system work?

o What will it cost me to set up a Bloomtools franchise?

o What kind of training, marketing and support is offered by Bloomtools?

Asking questions like this will help you get as much information as possible so you can make an informed decision.

Step 7 – Pick a winner

Now that you’ve had a chance to speak to someone from each of your shortlisted franchises, evaluate what you’ve learnt and choose a favourite to pursue. Once you choose to contact this franchise again to get more information, you are moving along the franchisee process, but you are not yet locked into anything.

Usually this stage will involve signing a confidentiality agreement, because the franchisor will be giving you information that they don’t want you to pass onto anyone else. These agreements are standard in the industry, but make sure you read it thoroughly before you sign it. At this stage, the franchisor will also want to make sure you are the right type of person for them, so they may ask for permission to do a credit check on you and ask you some qualifying questions. If both parties are keen, you can continue to move onto the next stage which involves you signing an agreement and gaining access to their financial data.

Step 8 – Find out more

Once you’ve gotten this far in the franchisee process, you are obviously pretty serious about investing in the franchise. After you’ve signed an agreement with the franchisor and been given their financial data and other information, you get a period of time to conduct what is called ‘due diligence’. This basically just means doing even more thorough research and seeking professional advice.

Get more detailed information about the company by speaking to their other franchisees and researching more about their products and services, history and directors. Then meet with your lawyer and accountant to go through everything with them and get their expert opinion. Make sure you take advantage of this time to learn as much as you can, then compare it with your experience, skills and financial situation. If you aren’t 100% convinced that it’s the opportunity for you, then now is the time to pull out.

Step 9 – Arrange a formal meeting

As mentioned, it is just as important to the franchisor that you are the right person for the job. So once you’ve received all the information from them and passed all their checks, it’s time to have a formal interview with their franchising team. This is designed to find out if you are compatible with their business and to discuss all the finer details of the opportunity. Obviously you will still have more questions, so use this opportunity to ask them – don’t leave this meeting without finding out what you want to know. Also, evaluate the key people in the franchise face-to-face – if you don’t like the people, the franchise may not be for you. If the franchisor wants to formally offer you the franchise and you accept the offer, you will have to sign a legally binding agreement and organise to pay an initial deposit (the deposit will vary greatly depending on the company).

Step 10 – Use the ‘cooling off’ period

A ‘cooling off’ period is time that franchisors are legally required to give you to think about your decision to sign with them. This time is required by law because many people change their mind after signing because they got caught up in the excitement of the process or were pressured into it. In this time, you can withdraw from your agreement with them without losing your deposit. However you will be charged for any costs that the franchisor incurred in that time (such as lawyer’s fees), so the best idea is not to sign in the first place if you have doubts. If you do sign, but are then unsure, take advantage of this time to evaluate your decision and seek more advice if necessary.

Step 11 – Become a franchisee

Congratulations! You have now joined the thousands of Australians that own a franchise business and get to be their own boss. This stage of the process involves making payment for the franchise you have purchased and getting your business underway. Firstly you will need to arrange a time to begin the training offered by the franchisor and also organise the location of your business. The process and timelines at this stage really depend on the company you are involved with, so make sure you work this all out with them.

The final piece of advice I can give you is to maximise the opportunity you have been given – take advantage of extra training, engage in lots of local area marketing, build strong relationships with the franchisor and other franchisees and do everything you possibly can to achieve success in your business. If you do this, the results will speak for themselves. Good luck!

Looking for an Internet franchise where we do the work and you profit? Look no further than Bloomtools. We give people that are passionate about the Internet and business the opportunity to own their own world-class website development and Internet marketing franchise, all without having to know how to build a website. You meet and talk, we build, you profit – it’s that simple. Visit our website for more information.

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About the Author

Australian No.1 Franchisor directory, Business for sale, Franchise Business Opportunities |
Web design Australia, Website Development, SEO Australia, Search Engine Optimization, Developer Tool
Australia’s No. 1 Internet business franchises

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