Joel Libava
What are the top franchise systems?
It’s a question I’m often asked.
Now I could give the “usual” answers. The ones us franchise folks tend to give. Like:
“McDonald’s.
“Starbucks…wait…never mind.”
But I decided I’m not going to provide brand names anymore. It’s too easy. Lazy even.
Instead, I’m going to give them…and you, a list of things that all strong franchise systems have. It’s just better.
And if you’re looking to buy a franchise someday, I recommend using the information below to vet the franchises you’re thinking of buying.
The Top 12 Ingredients All Top Franchise Systems Have
If you’re looking to buy a franchise, and you’re determined to only investigate the best ones, I encourage you to take note of what determines today’s top franchise systems. Let’s begin.
1. A strong brand presence
It’s important take a look at the “brand” you’re investing in.
For instance, what does the franchise brand stand for?
When you see or hear the name, what’s the first thing that comes to mind?
What do you see?
Is it positive?
I hope so!
Finally, what do your potential customers see?
As in, what’s the word on the street?
2. Proven, profitable, local marketing templates for franchisees.
If you become a franchisee, does your franchisor have specific marketing/advertising materials you can use immediately?
Will the marketing team onboard you so you can start getting the word out locally, ASAP?
Can you make money using the ads?
Here’s how to find out:
When you call franchisees (as part of your research), ask them how the marketing is, and if the marketing/advertising programs make them money.
If that’s the case, you’re looking at a good franchise system at work.
Public Relations In Franchise Systems
3. Aggressive Public Relations campaigns.
Does the franchisor have a contract with a Public Relations firm?
If so, how aggressive is the firm?
For example, are Press Releases sent out monthly-or at least several times a year?
Does the brand get mentioned nationally and locally?
Finally, does the franchisor spare no expense when choosing a PR firm?
4. A top-shelf franchise operating manual.
How good is the Franchise Operating Manual?
Until you become a franchisee, it’s going to be tough to get your hands on it. But don’t worry. There is a way to find out if it’s good or not.
All you need to do is ask a couple of franchisees.
That’s right. Include a question about the quality of the operating manual when you’re on the phone with existing franchisees.
And speaking of talking to franchise owners as part of your franchise research, some of the best questions you need to ask them can be found here.
5. Robust business technology.
A franchise business system without the right technology to run it, is a franchise system that’s in trouble.
That’s why you need to get a feel of the technology the franchisor uses. And it’s not hard to do.
That’s because if you get far enough in the franchise buying process, you’ll be invited to a Franchise Discovery Day at headquarters. That means you’ll be able to see the technology in action. And you may even be able to meet with the IT people and get more information.
Finally, some franchise systems have created their own proprietary technology.
That’s what Spring Green did. And it’s an integral part of their wildly-successful franchise system.
The Corporate Culture At Franchise Headquarters
6. Friendly corporate culture.
Another thing you’ll be able to do when you visit franchise headquarters?
You’ll be able to get a good feel for the corporate culture. (As long as you’re a good observer of people)
For example, when you sit down and talk with department heads, how do they communicate? How do they act? Do they look you in the eyes, or is the person you’re trying to get information from look more like this?
Do the employees at headquarters seem to care about franchisees?
What is the atmosphere like?
Do the employees seem like winners?
What about the CEO?
Is she positive? Does she have a future vision for the company?
Does she want franchisees to make lots of money?
7. Open lines of communication from the bottom up and from the top down.
If you talk to enough franchisees during the due diligence phase of your franchise business research, you’ll be able to get a good feel of how open the lines of communication are.
For example, if a franchisee has a problem that he doesn’t feel is being solved, how far up the chain is he comfortable going to get a resolution?
Namely, are the executives, including and up to the CEO, willing to get involved if needed?
And how open is the executive team to suggestions?
These are important things to find out before you pull the trigger on a franchise to own.
8. A top-notch franchisee training program.
You’re going to need to be trained before you open for business. The question you need to ask franchisors and franchisors is “How good is your training?”
Because if the franchise owner training you get is just average, it’s going to take a lot longer for you to feel like you know what you’re doing in your new business. You don’t want that!
Note: These days, a lot of franchisors include wonderful pre-training programs.
And sometimes they begin within a week or so after you officially come on board as a franchisee. The program is usually pre-packaged, well-produced, and can be done online.
Another thing you’ll need to have-and should expect a top franchise system to have?
Useful ongoing training for new product/service introductions, technology upgrades, new marketing programs and more.
Makes sense, right?
Do Top Franchise Systems Have Franchisee Associations?
9. A franchisor-respected franchisee association.
It’s becoming more common for franchisees to have their own associations.
That said, it’s your choice whether or not you want to be involved in them or not.
But some of these franchisee associations are excellent. Plus, they’re a great place for your voice to be heard.
FYI: A franchisee association needs to be accepted and respected by the franchisor.
10. Speedy support for franchisees.
Although instant franchisee support isn’t always realistic, it does need to be fast.
And the only way to find out how quick support is for franchise owners, is by…you guessed it; talking with franchisees.
11. Picky executives.
If the franchise system you’re investigating has franchise company executives who have the courage to turn away prospective franchisees who aren’t a fit for the franchise business system, you may have found a winner.
Here’s what to ask your franchise salesperson:
“Have you ever turned down prospective franchisees?”
If he answered “yes,” have him tell you a few stories. A few instances that the team turned away prospective franchisees.
Get specifics!
Because if people interested in buying the franchise you want to buy were turned down, it may mean that the executives are picky. And that’s what you want, because strong franchisees help make a franchise system strong and successful!
12. Territory exclusivity for franchisees.
About Your Franchise Territory
Now that you know a little more about the territory you get when you become a franchise owner, you do need to find out if territories are exclusive.
Specifically, you need to know you’ll be protected from other franchisees or even a corporate store selling into your territory.
A gentle tip:
Hire a franchise attorney before you agree to buy a franchise!
Why?
Because you need to protect yourself and your assets.
Now here comes the best part.
It’s a fact that all strong franchise systems have a significant number of happy, profitable, franchisees.
“But Joel, how can I find out if they’re happy-and making money?”
Just ask them.
Now go out and find a top franchise system to partner with, so you can start taking more control of your life!
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