If you are looking to buy the right franchise, how do you do your research to see if this is the correct franchise for you? First, do you research on the Internet, research the industry, research the company, go to franchise shows and talk to the franchisor. The best place to go to do you research is talk to as many franchisees as you can. Talk to franchisees in your home town/city, drive to other cities to see how the franchisees are being treated, what support do they get from the franchisor? They will tell you more than all your research combined. Are they happy, would they buy another franchise, what do they like and dislike about the franchisor.
Look to see if the franchise business plan is realistic. I am aware of a US franchise looking to come in a significant manner into Canada. They have two small franchises in Canada now but they have been concentrating on R&D for the last few years and are trying to develop new products to support the franchisees. The franchise has developed a niche market which is not being served by any one company and they are looking to provide products and support to the new franchisees to expand their business and become successful.
Some franchise models have been to sell as many franchises as possible knowing that many may not succeed. Some franchises are in the business of making money on the franchise fee and do not care about the franchisee. Some franchises have had problems finding investors so they have pooled multiple investors who do not know each other to buy a franchise and run it collectively. The investors did not know each other and when each retail location had 4 or more investors, there was a lot of friction and they no longer exist as a franchise today.
Who should not buy a franchise – senior sales people, dentists and doctors. Based on comments of several franchisors, sales people believe that they know how to sell a product and as a result refuse to follow the system developed by the franchisor. Dentists and doctors seem to fall into this category as well and do not run the business following recommendations of head office. That is not to say that anyone in sales or in the medical business may not be a good franchisee, but owning a franchise is more than having money, it is a commitment to a system established by someone else and not following what you want to do. If you want to do what you believe is correct, do not buy a franchise, buy a business which is for sale instead.