When evaluating a franchise opportunity, the best method of getting real information is talking to other franchisees in the system. But what happens when there are no other franchisees and you have the opportunity of being the first one? Knowing what to look for can prevent making a bad decision.
As an example, let's say you are investigating a new restaurant concept. The owners have been able to operate a restaurant successfully for two years but have no experience in franchising. You have no experience in either restaurants or franchising but you're considering the opportunity.
First of all, there is nothing more exciting than being a pioneer. They're the people that built this great country. They took incredible risks by wagering their lives and property on a dream of better things to come and some reaped fantastic rewards for their efforts. Of course many of them did not survive the journey and that's the downside of being a pioneer.
Any good franchise opportunity must offer three core elements of value to a prospective franchisee. These are:
A Valuable Brand. A franchise system should have a brand that has value
in the eyes of consumers. This symbol stands for quality and predictable products
and services whenever the consumer comes into any unit operating under the
brand.
A Proven Business System. A franchise system should have a business format developed so that a new franchisee can be taught exactly what they need to do in order to produce predictable and successful results operating the business.
Strong Franchisee Support. This includes not only the initial support and training to get a new franchisee's business up and operating but also ongoing support to help an existing franchisee deal with problems as they arise in the future.
The challenge with any new franchise opportunity is that, by definition, its results are not going to be predictable. They have no significant track record of taking people who are not experienced in their business and making them into successful operators. It might work out fine but you have no way of knowing in advance.
In this example, the restaurant owners will have to develop expertise in real estate location and negotiation, unit construction (including dealing with all the codes and other matters in varied jurisdictions), equipment sourcing and financing, and a multitude of employee issues just to start the list.
As a new franchisee, you'd have to suffer not only through your own learning curve, but the franchisor's as well. You would be hard pressed to find a more difficult industry for a franchisor to start in and to do it without a fully operational support system is going to add to the difficulty.
Your spirit is admirable but discretion is the better part of valor. You should broaden your search to at least look into other franchises so that you can do a comparison of the services and support that are usually available and that you'll need. This will help ensure that you don't end up as one of the pioneers that didn't make it to the end of the trail.
