Episode 5: Buying a Franchise? Build Confidence Through Evidence

Are you thinking about buying a franchise?

In Episode 5 of The New Zealand Franchising Podcast, Dr Callum Floyd provides a practical framework for assessing a franchise opportunity.

Rather than simply focusing on the questions prospective franchisees should ask, the episode also looks at the evidence that can help build confidence in the answers.

The discussion covers six interconnected areas:

1. personal fit
2. the money
3. the business and market
4. the franchise system and support
5. the people and relationships
6. due diligence and the plan

This episode explores the practical evidence prospective franchisees can look for, including franchisee experience, financial models and benchmarking, local market information, training and support systems, franchisee satisfaction measures, disclosure information, and independent legal and accounting advice.

A key theme is that buying a franchise is a progressive process. You may not have access to every piece of detailed information at the outset, but as the process develops, your understanding and your confidence should deepen.

Six areas to consider when buying a franchise

1. You: Are you suited to the actual role, workload and responsibilities involved in operating the franchise?
2. The money: Do you have confidence around the total investment required, working capital, likely income and potential return?
3. The business and market: Is there sufficient demand in the proposed territory or location, and has the business model worked successfully in comparable markets?
4. The system and support: Does the franchisor have the training, tools, marketing systems, field support and practical experience to help a new franchisee build towards sustainable performance?
5. The people and relationships: Do you trust the franchisor and have confidence in the people you will be working with over the long term?
6. Due diligence and the plan: Have you independently tested the opportunity through disclosure information, franchisee discussions, specialist legal and accounting advice, and a sound start-up business plan?

Key takeaway about buying a franchise

The important questions are:

1. What do I need to know?
   and
2. What evidence would give me confidence?

Good franchise buying decisions are rarely based on one presentation, one set of figures or one conversation. They are built progressively by gathering evidence from different sources and seeing whether those sources tell a consistent story.

Franchize Consultants works with businesses at many different starting points, from a single successful operation through to large company-owned, licensing, dealer, agency and contractor networks. Our work can include franchise feasibility assessment, financial modelling, franchise architecture, franchise development, documentation, manuals, training and implementation support.

Considering franchising your business?

Contact Franchize Consultants if you are interested in meeting about franchising your business. Or if you would like help with an established franchise network. We’d be very happy to sit down with you to understand your situation and objectives and explain the supporting services we provide. You can also follow us via LinkedIn, Facebook, Instagram and Google.