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.