Joel Libava
I recently published The 2017 Franchise Buyer Survey. As you’ll see, the results were mostly blah.
Only 7 questions in length, the survey was designed with one thing in mind; to learn about today’s prospective franchise owners: They’re “why’s,” “what’s,” “when’s,” and “how’s.”
Buy why did I make the survey so short?
Because people are busy. I wanted to have as many prospective franchise owners answer the questions as possible.
My comments/observations are under each of the images.
The Results Of The 2017 Franchise Buyer Survey
Why Are You Thinking About Buying A Franchise?
A lot of the people who call me to find out more about my products and/or my 1-on-1 franchise ownership consultations-are out of work. That’s why I’m a bit surprised by the results above.
The answers show that there are definitely unhappy people around…folks who hate their jobs. But maybe they’re staying at their jobs longer. Maybe they’re willing to put up with a lot more crap these days. Possible reasons:
- Intense uncertainty because of him
- Unusually high stock market (When is the other shoe going to drop?)
- Family pressure to “hang in there“
I’m sure there are other reasons.
What are yours?
How much of your own money (before getting a business loan) can you invest?
Most of the people who answered this survey question are being realistic. With the average total upfront investment of a franchise being around $175,000 or so, putting $50,000-$100,000 up-before a loan, is right on the money. That’s because today’s lenders need to see real skin ($$$$) in the game.
Fact: No Money Down Means No Franchise
Small Business Loan Tip: If you don’t have $50,000 liquid available, franchise ownership may be out of reach.
You can apply for a loan, including a non-traditional one, right here.
Ideally, when would you like to be in business?
Buying a franchise is a big deal; the dominant answer to this survey question reveals that fact.
What I’m referring to is the answer, “Within a year,” because it’s a nice, comfortable, safe answer. There is very little in the way of a “commitment,” to becoming your own boss with an answer like that. It’s the popular “I’m just looking around right now,” thing-which is fine. It’s where most people start. It’s the “learning” stage. Lucky for you I created Franchise Business University, where you can learn everything you need to know about franchising.
Click the Crown to take my free introductory course on franchise ownership.
What type (s) of franchises interest you?
The most popular franchise category-and the largest one, is food. So, it’s no surprise that respondents to The 2017 Franchise Buyer Survey answered the way they did. Can you say pizza pie?
One the other hand, the interest shown by respondents in the Business-to-Business franchise category was surprising. A number that high, (38%) can mean one of two things:
A. Respondents didn’t know that Business-to-Business (B2B) franchise opportunities are really “sales” opportunities.
In other words, when you own a B2B franchise, outside sales, including a lot of cold-calling, is required. And the sales activities are usually done by you.
B. Respondents did know that there would be a lot of selling involved, and they liked that fact.
They also may have been attracted to the idea of being a home-based franchise business owner. (A lot of B2B franchises can be run from home.)
What are your growth plans?
(Gold-colored bar-the complete answer was: “I’d like to control an entire geographical area.”)
The interest in owning multiple franchise locations-becoming a multi-unit franchise owner, was as high as owning only one franchise unit. Interesting.
Buying A Franchise?
You're Going To Need This!
To put it another way, today’s franchise buyers are very open to owning a business that could become pretty big. I like that. (Franchisors do too!)
Are you looking to own a six-figure franchise business?
If so, see if you can latch-on to a multi-unit franchise opportunity. Maybe a young franchise like this one. Or even this franchise opportunity. Newer franchise concepts tend to have wide-open territories. Another words, you can have first dibs on potentially lucrative locations.
FYI: There’s nothing wrong with owning one franchise location. You can still do well, financially. It just depends on the one you choose, and if you can do enough volume.
What kind of help are you planning on getting?
(The text before the grey bar in middle is cut off: Answer was: “I may be willing to pay someone to help me do this right.” The text in the gold bar is cut off, too. Here is what it reads: “I’m thinking of working with a franchise broker/consultant.” – The ones who offer their services for free.)
Look at the blue bar. It reveals that more people than not realize the importance of hiring a franchise attorney! That makes me very, very, happy.
Hiring a franchise attorney-a good one, will go a long way in helping you sleep better at night. Because you’ll be protected.
Today’s Franchise Disclosure Documents (FDD’s) are barely written in English. There’s a lot to digest.
And, contrary to some of the alternative facts that some franchise salespeople and/or franchise “consultants” might tell you, there may be things in your franchise agreement (contract) that are negotiable.
Please hire a franchise attorney before you send your franchise fee check in-and before you sign your franchise agreement.
I’m also happy to see that that most of the respondents don’t want to tackle buying a franchise alone.
That’s smart.
