Five Buying Tips a Print Shop Franchisor May Not Tell You

If you search the Web for tips on franchise buying, there is no shortage of articles worth reading. Though many do a great job of explaining such topics as how to avoid purchasing a failing franchise, understanding the FDD, getting your financing in order, etc., most fail to touch on how to make the decision, especially when you think you might have a company in mind. The following five tips will help you as you enter and exit the discovery phase of your franchise buying process.

1) Don’t be enamored by the best in the group.

Too often, potential candidates make a decision based on the results of the number-one franchisee in the system. The new candidate enters with delusions of grandeur, instead of realistic expectations.

Of course, it is great to aspire to be the best, but would you put hundreds of thousands of dollars on the line because you hoped to be like Michael Jordan? Instead, make your decision based on the five or six franchisees that fall right in the middle of the pack. Ask yourself:

  • “Can I do what these franchisees are doing and get at least the same results?”
  • “Can I live with my return on investment if average is all I can be?”

It is great to know what separates the top 20 percent from everyone else. Caution is still warranted. Here are a few questions you should ask the successful franchisees:

  • How long did it take you to get here?
  • How many franchisees were in the system when you achieved this status?
  • How many times have you fallen in and out of the top 20 percent?

I’d also want to get a list of the people who achieved top 20 percent status in the last five years. Earning this status during the booming economies of the ’80s and ’90s is much different than doing it today.

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  • wikidfranchise.org

    Wow – that takes real guts to try and be sober to the prospective buyer of your franchise! With great businesses failing because of the marketplace, I’m guessing this is your attempt at trying to win their allegiance by being somewhat honest? Your comment "consider us a limited resource" carries the most truth. The reality is that if you’re an entrepreneur, you’re not going to ever be happy in a franchise. The franchise owns all the rights, all the money, all the legal control via a one-sided contract with not one ounce of levity for the franchisee. A good franchisee follows orders, accepts that corporate isn’t there for him, works 70+ hours per week to bring home a measly living with no way of ever retrieving his sunk costs. Please don’t sell your wares here. The print industry has enough problems without someone like you trying to take an unsuspecting mark’s life savings in return for a life of indentured servitude. If you were to put it into the context of buying a home, it would go something like this: Franchisor: I’ll pick the house, you pay for it, I’ll tell you when to remodel, mow the lawn and paint it. I can come and go as I please, critique your business and you will use all of the vendors I tell you to use or be in breach. After 10 years and the contract is up, I’ll keep the house (and sell it to someone else) and you will move out or sign up for another 10 years and do what I tell you, how and when I tell you. Who in their right mind would fall for this?

  • aspireforbill

    I think this is great advice, O wise ghost blogger. It is a good practice to prepare and be skeptical. Ask the good questions and let your passion and enthusiasm get in the way of assessing the validity of the franchise decision.