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.  

When it comes to buying a business, there’s no truth that doesn’t require verification.

As everyone knows, if it sounds too good to be true, it probably is. Yet every day the newspaper has stories about people who got tricked into a deal that turned out to be mainly smoke and mirrors.

So how do those “lucky” folks find their way to the good business deals? First of all, luck has nothing to do with it. Rather, it’s about finding out as much information as you can and triple-checking everything you know before you even get started.

Doing your due diligence is the most critical part of the process.

That’s why a franchise presents such a great opportunity because it’s the only type of business in which you can learn everything about its nuts and bolts before you buy.

Not only does it come with a tried-and-true operating system, but it also includes complete training and ongoing support to help you make it past the start-up phase for long-term success.

Federal law requires franchisors to disclose almost everything you need to know. And what’s missing from the Franchise Disclosure Document (FDD) can be learned from franchisees. That means you can find out about all the red flags, upfront costs and whether the franchise has the potential to offer you the kind of income you desire.

In addition, another layer of vetting can be obtained by consulting with a franchise coach or two. Their no-fee advice can help you navigate a gigantic universe of some 3,000 different franchisors.

A good franchise coach can save you precious time by steering you to franchise systems with great track records that you may have otherwise never found.

So, to find a top-performing franchise, start with a franchise coach, then select a few whose business models best mesh with your skills and experience, then start to read the FDDs and call franchisees to get the ins and outs of their businesses.

In the end, you have to decide if you would rather put all your hard work and drive into building a future you can control or sticking with the steady job that may not last the rest of your career.

Stay tuned for Part II: How to evaluate a franchise

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

Franchising is big business that keeps getting bigger, and there’s lots of money to be made — that is if you know where to look. The trick is to hitch your wagon to the fastest, strongest horse!

That means you have to screen out less than ideal businesses to find the right one with the sure-fire system.

Most of the information you would need is available either in the Franchise Disclosure Document (FDD), which all franchisors are required by federal law to disclose to potential franchisees, or through the interviews you should do as part of your due diligence.

So whatever you do, don’t sign any contracts based on superficial knowledge. Your research should go deep and should include advice from the experts.

What Everyone Should Know About a Franchise before Signing a Contract

Litigation History

If a franchisor has been the object of numerous lawsuits from disgruntled franchisees, walk the other way. This history is easily discovered in Item 3 of the FDD. A simple Google search might dredge up more detail, but remember, just because you read it online doesn’t make it true!

Track Record

Ideally, the franchise you choose should have plenty of franchisees operating successfully for a sufficient period of time. They are the folks, after all, who will be perfecting the franchise system and helping you succeed with your business. Look at the list of outlets, Item 20, in the FDD. Where are they and when were they established?

All Upfront fees

These would include an initial franchise fee, and costs to start up the operation, marketing fees, the cost to buy any equipment you need, build out a location, hire employees, and sign a lease. You also want to factor in the cost to consult an attorney and an accountant. If the numbers appear unaffordable, you shouldn’t sign because one of the biggest causes of business failure is undercapitalization. All costs are listed in the FDD, Items 5-7.

A Franchisee’s Obligations

If you don’t agree with all the expectations for how you must operate, this business is not for you. Find this information in Item 9.

Renewal and Termination Procedures

The franchisor is also required to detail how a franchise can be terminated or ownership transferred or renewed. Know these details upfront, because there will come a time when you want to sell either to retire with your hard-earned wealth or for a tidy profit. Advice from a franchise attorney is well worth the cost.

Why franchisees have left the system

With the list of outlets in the FDD (Item 20) you also get contacts for franchisees who have left the system in the last three years. Call them and find out why. If you learn about a pattern of neglect you might want to back away. Just remember, sometimes the fault lies with the franchisee, and don’t just take one person’s word.

What current franchisees say about the franchisor

Interview current franchisees. What works for them? Are they making money? Are they happy with the business? Would they make the purchase again?

While your research may take some time, and expert advice may add some expense, the payoff is in choosing a great franchise that gives you the life and the living you always wished for and that works for you in the long run.

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

Are you cruising along in a job that you can do with your eyes closed, maybe even with your hands tied behind your back? Everything is humming, and your industry seems solid. Then, bam! Something happens that shatters all your old assumptions and you start to wonder, what are my options? That’s what happened to Dennis Clouser, of Tampa, Fla., who, as a mechanical engineer, had spent 30 years in the electrical connector industry. His last job with the billion-dollar company ITT Corp. ended abruptly after his division’s largest customer, a military contractor, pulled its business once the federal government imposed massive across-the board cuts as part of “deficit reduction sequestration” in early 2013. At the age of 51, Clouser received a six-month severance package, and the company made classes available to him to help him figure out his next stage. One of those classes introduced him to the option of a franchise. Before long, Clouser lined up another job doing exactly what he had been doing for 30 years. But doubts soon started creeping into his mind. “I thought, is this it?” Clouser recounted. “The hell with it. I’ll take a chance on myself for once instead of doing what I’ve been doing until I die. Maybe I can do something different.” He had a couple of friends with franchises, and he thought, well, if they can do it, maybe he could, too. With the help of a franchise coach, he started doing his research. “101 Mobility really grabbed me,” he said, referring to the franchise that sells mobility equipment, such as stair lifts, auto lifts and ramps to help people with disabilities stay in their homes. “I could help people instead of making bombs to blow them up.” Clousen felt a personal connection to the mission of helping people deal with their mobility issues around the house since two members of his family had suffered amputations that resulted from complications from Diabetes. While Clausen was confident about his mechanical abilities — “I can put anything together” —when it came to the other aspects of running a business, from bookkeeping to managing payroll and benefits, he felt less sure of himself. That’s where the franchise company’s support really came in handy. “101 is fanatical about opening steps,” he said. “There are biweekly meetings with people in corporate” where they discuss everything from finding a location, negotiating a lease to paying taxes. “They manage you every step of the way,” he said. “I wouldn’t have been able to open without learning what I learned from them.” As part of the preparation process, he talked to franchisees, some of whom were more helpful than others, but he finds the idea of sharing one’s experiences one of the most compelling aspects of having a franchise. For example, he particularly likes the franchise’s new program, “Talk to a Franchise,” where he, now as an existing franchisee, talks to three or four potential franchisees on the phone, and they get the opportunity to ask him whatever questions come to mind. “I’m really blunt with them,” he said. For starters, he tells them starting up a franchise is a lot of work. After two years with his new business, while he acknowledged making some mistakes along the way, he would definitely do it again. The difference is now he’s got total control of his life. And while he knows he may be working until 9 p.m. doing an evaluation of someone’s home, if the water sparkles particularly bright one sunny day, and an empty parking space beckons from St. Pete’s beach, he knows he can take an hour for a swim if he feels like it. Not a bad living. Not bad at all. 

About the author

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.