If you want to start a business, you may have a few stars in your eyes — think Steve Jobs in a garage or Ray Kroc planning an unheard of chain of hamburger joints, but Apple and McDonald’s are more the exception than the rule. Blink away the stars and get down to work. There is a great deal you can do to improve your odds of success. At the top of that list is research. Know as much as you can before you sign any contracts or put any money on the line. An advantage of a franchise is you get access to a wealth of information, including training and ongoing support, to help you decide whether you can succeed with a particular business. The franchisor’s system, however, can be a double-edged sword. On the one hand, it shows you all you need to do to achieve profitability, but if you’re not willing to follow the franchisor’s system and you would prefer to do tweak things because “you know better,” a franchise is probably not for you. We like the franchise model because it allows you to minimize your risk while still reaping many of the rewards of owning your own business: you can take control of your career and increase your income. But not all franchises are worth your investment. The trick is to figure out which ones are. The good news is the Federal Trade Commission requires franchisors to disclose a great deal of helpful information in a franchise disclosure document (FDD). A good franchise coach can help you peruse this document, but the FTC requires it be written in standard English — no legalese — so you certainly can begin the process yourself.

8 Ways To Vet A Franchise

1. Check out the franchisor’s background.

How long has the franchisor been in business? What is the background of the company executives? How long have they been with the company? Answers can be found in Items 1 and 2 of the FDD.

2. Learn if the franchisor has a history of litigation.

If the franchise has faced a history of lawsuits with its franchisees, you need to read no further. Ideally, a franchisor should work with the potential franchisees well ahead of time, so both parties know what will be necessary to hold up their sides of the contract. Item 3 in the FDD.

3. Know your costs.

You will find the initial franchise fee, which typically ranges from $35,000 to $50,000. You will also find all of the costs to set up the business, from the lease, to outfitting a store, initial inventory, as well as marketing and advertising. You will also find royalty fees, usually a percentage of sales. Most of the franchises we work with have a total investment ranging from $50,000 to $150,000. FDD items 5-7.

4. Can you live with the franchisor’s system?

If you buy a franchise it will be because you have learned that their franchisees are successful. You will know that their method of doing things works. If you join the company you will want to implement the system the franchisor has already proven. Will you be able to follow their system? Do not invest in the franchise if you won’t.. Items 2 and 8 in the FDD.

5. Rate their training.

Item 11 of the FDD will describe the franchisor’s training program, from the topics covered during the training, how many hours it requires, the cost and who is covered by the training. You can find out a lot more about the training program by interviewing franchisees.

6. Know the costs and expertise of their advertising and marketing support.

Every new business requires a marketing program. Make sure you know what the franchisor will provide and what it will cost you. FDD items 6 and 11.

7. Interview current and former franchisees.

Probably your most important step in the process is reading through FDD item 20 to see the list of franchisees, which includes former franchisees, and their contact information. Plan to interview as many as possible to check into the franchise. Hear the unvarnished details from those who came before you. The most important question is whether the franchisee would make the purchase again knowing what they know now. Why or why not?

8. Assess the franchisor’s financial history.

You will find the franchisor’s financial statements in tem 21 of the FDD. You don’t want to invest in a franchise that is tottering on the edge of financial viability. For more information, check out the FTC’s website, which has published a consumer guide to buying a franchise. Ready to make your dream of becoming an entrepreneur come true?

Get your free evaluation today!  

Ready to make your dream of becoming an entrepreneur come true? Get your free evaluation today! Contact Dan Citrenbaum to help you create the career you’ve always wanted. As a business coach, Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at [email protected] or at (484) 278-4589. 

If you feel like you’ve spent too long in your job, are bored and losing hope of advancement, don’t despair. Take charge and consider starting a business of your own to fully realize your talents.

A great way to minimize your risk is to consider a franchise — which offers hundreds of ways to start anew as a business owner. You get to be the boss while taking advantage of the experience of other franchisees and an operating system that has been tested over time to help maximize your chance for success. All you have to do is be willing to follow the franchisor’s system. If you are, you can reap the rewards for yourself. Not only do you get to take charge of your day-to-day life — no more clearing days off with six layers of bureaucracy — you have the potential for far greater income than you ever would stagnating as a management executive. As a matter of fact, most millionaires in the United States made their money by operating their own businesses, according to a study by the authors of “The Millionaire Next Door,” Thomas Stanley and William Danko. Franchises offer a way to reduce your learning curve in a business you may have no experience in. With more than 3,000 franchisors in 75 industries to choose from, the hard part is making the right choice, which is why it’s so important to do your research and consult expert advice. Your reward for doing your due diligence is the potential payoff of operating a successful business.

5 Tangible Advantages Of Franchising

With a franchise, you get:

A Proven System

A franchise operation has over time developed a system, complete with specifications on how to set up the operation, hire employees and run an advertising program. In addition, you get advertising material and computer software. All of these elements help you succeed. Of course, some franchises are better than others, and your research should help you weed out the worst and find the right match for your talents and expertise.

Support And Training

The franchisor will teach you how to do it all, and the company offers ongoing support to get you through the learning phase. You will get to meet the support staff and become acquainted with the corporate culture before signing any contracts, so you can ensure a copacetic working environment for the long term.

Lots Of Available Information About The Business

The single most important source of information you have about this new business is the experience of franchisees. You will be encouraged to speak to many of the franchisees – as many as it takes for you to fully understand exactly what the business is like. They can tell you how the system has worked for them, if the numbers add up as promised, if the company has been good to work with and whether they are making the kind of money they expected. Remember to expect regional differences.

Franchise Disclosure Document

By federal law, every franchise must disclose a great deal of pertinent information in its FDD. Once you show yourself a serious potential buyer, they will provide you a document written in standard English, no legalize allowed, that has 23 items. The FDD covers everything from the franchisor’s business experience, litigation or bankruptcy history, a complete accounting of all costs you should expect, from startup fees to royalties, restrictions on the sale of the business and a complete list of current and former franchisees.

Higher Success Rate

Franchises generally have a higher success rate than independent businesses. From my experience, we feel we can confidently say our clients can achieve a 90 percent or better success rate, as a result of the research we walk them through. A recent study shows that 91 percent of franchises were still in business after two years, and 85 percent were still in business after five years. Even with all the above items available to reduce risk, you can still get in over your head if you don’t plan for enough capital to get you through the start-up phase to profitability. Ready to make your dream of becoming an entrepreneur come true?

Ready to make your dream of becoming an entrepreneur come true? Get your free evaluation today! Contact Dan Citrenbaum to help you create the career you’ve always wanted. As a business coach, Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at [email protected] or at (484) 278-5489.

Remember those carefree college days when you declared your major and thought that what you really wanted was a job that would make you a good living and, if all went well, you would one day earn a million dollars?

A million dollars doesn’t seem like so much money anymore with the number of billionaires proliferating about as fast as the middle class is shrinking. And you’ve realized that tying your future to someone else’s trajectory has its risks.

The fact is you’re far more likely to become a millionaire by owning your own business than any other method. But, as we all learn sooner or later, it’s not really about the money. It’s about finding fulfillment in your work, feeling appreciated for what you do and controlling your own destiny.

About two-thirds of American millionaires are self-employed, according to the authors of “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy” by Thomas Stanley and William Danko. Three quarters of them consider themselves entrepreneurs, and most of the rest are self-employed professionals, such as doctors and accountants.

Many of these millionaires, write Stanley and Danko, got that way by focusing on the “delayed gratification” of building their business, rather than on simply getting a paycheck.

The same can be true of a creating a large, profitable business. Start slow and steady with a good idea, add hard work and realistic goals and build a flourishing business.

One way to make this happen, particularly for those who have no experience in the business they would like to get into, is to buy a franchise — which comes with all the backroom expertise, ready-made marketing and ongoing support and training. And you get to reap all the profits derived from your labor.

To fully explore your options, it’s a good idea to consult a franchise coach who can help connect you to a set of franchises that have a good track record, and you can start investigating.

In addition, you can find a whole lot of good information online, but there’s nothing like the information you can gain by working out some shoe leather. Go talk to franchisees, learn from people who are succeeding and find out what has worked for them or what mistakes they wish they hadn’t made.

In an age of consolidation and buyouts, act now to free yourself from dependence on a boss or a company that could change at any moment. There’s no point sitting on the sidelines a minute longer.

Ready to make your dream of becoming an entrepreneur come true?

Get your free evaluation today!

Contact Dan Citrenbaum to help you create the career you’ve always wanted. As a franchise coach, Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at [email protected] or at (484) 278-4589.

© Dan Citrenbaum 2022

The attraction of a good franchise is its proven system for making money. You plunk down your money, and the franchisor shares the secrets of the trade: follow these procedures and you, too, can have a successful business and earn a good living.

Related: Ready For A Career Switch? Consider A FranchiseThe tricky part is finding a franchise whose system is truly proven. This is why buying into a new franchise can be risky since they may still be working the kinks out of the system. After all, the franchise company learns more about the business model from the process of expansion. By the time, they’ve got a dozen or more franchises that have been operating successfully for at least a few years, the franchise has a proven track record. But not before then. And because we would never recommend buying a franchise where you didn’t have the opportunity to interview plenty of existing franchisees, this process tends to eliminate those systems that haven’t yet passed the test of time.

3 Simple Questions To Help You Separate The Winners From The Losers

How long has the franchisor been in business?

There are actually two parts of this question. First, when did the franchisor first start the business? They may have operated for years as a single unit operation. Or they may have originally started off with the idea of franchising. How long have they been franchising? What is their franchisee success rate?

How many outlets are there?

If the operation is mainly centered in the region around their headquarters, and you’re in a different part of the country, you may not want to jump into this without a lot more investigation. Learn about their process of expansion. If most of the expansion has occurred in the past year, their system may not be fully tested.

Are there regional differences in the system?

A good franchise is always experimenting. They may find some products or services are more popular in some places than others. For example, McDonald’s sells the McRib sandwich more often in the South than up North. Do you see evidence of creative flexibility? Once you have a solid assessment of how well the franchisor’s system actually works, you can move forward with your next set of questions. First and foremost: Can you follow this system? Assess yourself honestly. Even though it works for others there may be a multitude of reasons why it may not work for you. If this is the case, walk the other way. If, on the other hand, you like the system and it is a proven money-maker, you also need to know if you think you can you work well with the franchisor’s support team. Whatever you do, as you go through your due diligence, don’t let wishful thinking and romantic visions of a particular business bias your thinking. In other words, don’t fall in love with a franchise before you learn everything there is to know about it.

Ready to make your dream of becoming an entrepreneur come true? Get your free evaluation today! Contact Dan Citrenbaum to help you create the career you’ve always wanted. As a business coach, Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at [email protected] or at (484) 278-5489.

Just because you don’t like sales doesn’t mean you can’t own a business. That’s right. Contrary to popular belief, you can be a successful entrepreneur even if your strength doesn’t happen to be cold calling and glad-handing. If you visit a McDonalds the owner probably is not trying to close you on buying a burger. And the same holds true for many other types of businesses.

Opportunities abound with businesses whose customers are drawn in by an effective marketing campaign, a great location, or strong advertising. And you don’t even have to be an expert in a particular business to get going. All you need is to connect with a good franchise operation that matches your interests and skills, and you can get all the marketing and advertising expertise to help you get going. The trick is to capitalize on your strengths and let the franchisor fill in the gaps. Some large franchise organizations rely on national advertising and marketing programs to generate business. In addition, customers often actively seek out a conveniently located operation, often without realizing it’s an independently owned franchise. Just to give you a taste, here is a small sample of franchise types that fit these categories:

• Electronics sales and repair
• Fitness and Gyms
• Sandwich shops
• Hair Salons
• Residential painting and maintenance
• Pack and Ship businesses
• Massage therapy studios
• Academic tutoring

The trick is to make a good match with a franchise that has an established record of working to develop new franchisees into successful and profitable businesses. That’s where working with a franchise coach can help you use your time most efficiently. Let a franchise coach direct you to operations that have the best time-tested systems and a solid track record. Best of all their services are free since they’re paid by the franchisor. You would then be responsible for talking to as many franchisees as possible. Use their experiences and advice to help you determine if an operation is, in fact, a good match for you. The franchise coach can also help you with pointers on the essential due diligence you will need.

Ready to make your dream of becoming an entrepreneur come true? Get your free evaluation today! Contact Dan Citrenbaum to help you create the career you’ve always wanted. As a business coach, Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at [email protected] or at (484) 278-5489.  

The best thing about starting your own business with a franchise is that it comes with everything you need to succeed. So long as you choose a good company with a system that suits your strengths.

Related: Ready For A Career Switch? Consider A FranchiseThis is why your selection process becomes the most critical aspect of your work. When people fail with a franchise, the problems can invariably be traced back to before the beginning. Either they chose a franchise that required skills they didn’t possess or they chose a franchise system that was not ideal, for whatever reason. After years of experience reviewing franchise companies and working with franchisees, I have developed a process that has led to a near perfect success rate among my clients. All you need is to set aside some time over a period of several months and start researching.

What To Learn From The Franchise Disclosure Document

Every franchise is required by federal law to disclose the details about their business in the Franchise Disclosure Document. You should read all 23 items, with particular focus on the following:

The backgrounds of their executives, litigation and bankruptcy

You want to find out about the executives’ business experience. Have they or the company been involved in any litigation or bankruptcies. All are red flags. Items 1-4

Upfront costs

Clearly, you want to avoid getting in over your head. You need to know all your costs, exactly what is included with the franchise fees and what you may have to kick in yourself. Sufficient capitalization is one of they key prerequisites to success. Items 5-7

Franchisee’s obligations and restrictions

You should know right at the start exactly what will be expected of you. If you don’t like what you read, steer clear. Likewise, if the restrictions on operations strike you as particularly onerous, this franchise is not for you. You have to be prepared to follow their system for it to work. Items 8-9, 15.

Renewal and Termination terms

You need to know how easy it is for the franchisor to terminate its agreement with you. Likewise, if for some reason you want to get out of the business, know what rules apply. Legal advice might be helpful here.

List of franchise outlets

This is where you get the contact information for the franchisees, as well as franchisees who have left the system is the past three years. Contact and interview as many as possible. (see below) Item 20.

What To Ask Franchisees

Why did you choose this franchise?

Does they have anything in common with you? Can you see yourself in their shoes? Listen for clues about what skills are necessary for this business.

Have you been satisfied with the level of support and training from the franchisor?

Was it all that the franchisor promised? Do you like the support staff and executives of the franchisor? Are they easy to work with?

What do you like best and least about the business?

Get a good feel for what running this business is all about. Maybe the best thing is the social interaction with customers. Only problem is you don’t want to deal with the public. Choosing a business can be a lot like choosing a spouse. The match has to be particular to you.

Would you purchase this franchise again?

If the answer is no, find out why. These reasons may not hold for you.

How long did it take to reach break-even?

You need to know how much capital it would take to get this business to profitability.

Are you able to earn six figures with this business?

While you may not be able to get specifics on earnings, press for as much as you can to see how it aligns with the franchisor’s sales pitch.

Ready to make your dream of becoming an entrepreneur come true? Get your free evaluation today! Contact Dan Citrenbaum to help you create the career you’ve always wanted. As a business coach, Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at [email protected] or at (484) 278-5489.