As you start to get a feel for the types of questions that I want you to ask every current and former franchisee that you’re able to get a hold of, I want you to think of the “why’s.” In other words, try to get beyond the apparent simplicity of the questions as they appear in my book on franchise ownership. (Or in all 40 blog posts that I’m writing on this topic)
For example, the question that I’m about to share with you…
Question 4– “How long have you been in business?”
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On the surface, this one is pretty simple, right? Right? The answer will either be in months or in years. However…
If you’re able to connect with 15 current franchise owners, and you find that a good amount of them have been in business for less than 2 years, it may be cause for concern. But, it depends. How many franchisees are there in the system? If there are 500 franchisees, and most of the 15 that you were able to reach were pretty new–in business 2 years or less, it’s not a big deal. All you have to do at that point is call the franchise rep and ask for the names of franchisees that have been around longer. Call them, when you’ve worked through your current list. (Does that make sense?)
On the other hand, if you’re looking at becoming a franchise owner of a system that’s young–and maybe has 25 franchisees that are currently in business, your mission is a little more challenging.
In a Perfect Scenario
If I had the power to create a perfect franchise due diligence scenario, it would consist of you calling 15 current franchisees at first, and their lengths in business would be all over the board. Some would be brand new, maybe in business for 6 months; some would be 1-2 years in business, and others would be 5…maybe 10 years in business. That would make it easy for you to a get a feel of what the next 10 years of your life as a franchise owner would look like, feel like, and taste like.
But, I never received the power to create a great scenario like that. That’s right; even Kings have limits.
But, I do have something that’s almost as powerful;
I’d love to teach you what I know.