Franchise Fundamentals
10 Keys to a Quality Franchise System
How do
you know if a franchise is the right one for you? SERVPRO® realizes
selecting a franchise and a franchisor can be a difficult and
confusing process.
For this reason, SERVPRO developed the following list to help you in the franchise
selection process. We suggest you follow these steps to find the right
franchise for you. We hope your decision is SERVPRO!
1) Interview Franchisees
The best way to learn about the quality of a franchise system is to
speak with current franchisees. Call at least five franchisees
and visit at least two. It will provide you a realistic look at the
opportunity. In particular, ask about the following:
- Start Up Assistance
- Market Demand
- Profitability of the Franchise
- Whether the Franchisee Would Do It Again
2) Visit the Franchisor's Headquarters
You should know what support the franchisor provides. Interview
the franchisor's employees and see if there is an organized support effort. Most
franchisors claim to have a comprehensive support system. Be sure you
see what you’ve been told by the sales force. Visit the franchisor's team:
- Training Department
- Field Operational Support
- National Accounts
- Product and Supplies
- Information Services
- Advertising Department
3) Analyze the Financial
Stability of the Franchisor
If the highest source of revenue is franchise sales income, you
should be concerned. A franchise must generate enough royalty
revenue to maintain all company expenses. Otherwise, the franchisor
is very vulnerable to problems. Also, note the equity in the
company. A company should not be heavily in debt.
4) Talk to Executive Management
Are they focused on the future of the company, or are they
acting as day to day operations? How long has the management been in
place? What have they done to improve the company? What are the
current initiatives? Are the executives open and willing to speak
with you?
5) Initial Training
Talk to the last three franchises that completed training.
- Was the training complete?
- Do they feel well prepared?
- Is there complete documentation?
- What did their training consist of?
- Is your equipment/products package complete?
6) Operating Support
The franchisor should offer comprehensive support, especially in the
following areas:
- Regular Meetings
- Complete Documentation
- Regular Visitations To Your Site
- Employee Training
- Newsletter and Bulletins
- Product and Equipment Research & Development
- National Accounts Support
- Software/Automation Assistance
- Local Training Assistance
7) Quality Name Recognition
The name, or trademark, is a primary value of the franchisor. Make certain the
name of the franchise is known by key clients in the industry.
8) The Industry
Within what industry is the franchise operating? Is the product
or service a necessity? Is it a luxury/fad orientated item? How
large is the industry? Is the product or service diversified enough
to react to difficult entry markets, or is it a single
product/service offering?
9) Size of the Franchisor
The length of time in business and the total number of
franchisees will indicate how mature the franchisor is in the
marketplace. Quality Franchisors have steady growth and a good
history of service to the franchisees.
10) The Application Process
A franchisor should have a profile of the best franchise
candidates. There should be an organized process of learning about
the franchise offering. There should also be a qualification process
for the franchisees. |
