The last franchise blog post in this series on franchise research had to do with roles. (Your role as a franchisee) Hopefully you learned that things aren’t always what they seem-especially when they have to do with what your actual role is going to be as an owner. Pictures in a colorful brochure or on a website may or may not depict what the franchisee actually does, day-to-day. Please don’t make assumptions about what being a franchisee of whatever franchise concept you’ve honed in on entails. Deal?
The next couple of franchise research questions have to do with your neighbors-otherwise known as your competitors…
Here’s the question, as found on page 185 of Become a Franchise Owner!
“Were you aware of any competitors before you invested in your franchise?”
The Secret Reason For Asking This Franchise Research Question
The current franchisees that are in the system you’re interested in really need this question asked of them. Here’s why;
want need to get a feel of the market. In other words, are there massive amounts of competitors in the franchise sector you’re looking at. For example, I wrote about a still growing and very crowded franchise niche a while back. Find this out before you write a $35,000 check for the franchise fee.
B. You want to know how sharp the current franchisees that you’re reaching out to are. One way to do that is to dig in a bit with regards to their franchise research. Was their due diligence up to snuff?
It Is Important
If you’re wondering why it’s important to find out how good the franchisees that you’re contacting were at their own research…I don’t blame you; it does kind of sound unimportant. But it’s not. That’s because most of the people that are looking to become franchise owners have no idea how to do proper franchise research. No idea at all. It’s not because they’re a bunch of rum-dumbs; far from it. It’s just that they were never taught how to do it.
If you don’t know, you don’t know.
Great research, the kind of franchise research that I teach, is designed to leave no stone unturned. One of the stones has to do with competitors. Most of the franchise buyers that I’ve worked with over the years were focused on the national competition–not their local competition. Both are important. You’re going to want to know who the competitors are in your territory, and how many there are. You’re also going to want to find out how good they are. Right?
Here’s what I want you to do when you’re on the phone with current franchisees of the franchise business concept that you’re looking into;
Ask them how they researched the competition. Did they only find out about competitors on a national level? Or…did they dig deep, and find out about the competitors in the territory that they were interested in purchasing? (Their neighborhood)
The answers you get will not only give you an idea of the competitive landscape, but will give you insights into just how sharp the current crop of franchisees are.
Hint; you want to invest in a franchise that has a lot of sharp franchisees. Here’s a link to franchise research questions 1-11.
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