Blog Summary: Make sure to understand your franchise disclosure document (FDD), connect with current franchisees, evaluate how supportive the franchisor is, and do your own research.
Thinking about opening a franchise? Assuming you already have a good handle on how franchising works in general, here are a number of tips we hope you’ll find helpful to streamline the whole process.
1. Understand the Franchise Disclosure Document (FDD)
One of the most important documents for franchise owners to be aware of (and read carefully) is the franchise disclosure document (FDD).
These documents provide critical information about the franchise you’re looking to open, and you should carefully review all sections of the FDD for any franchise you plan to open.
Focus on the fine print and any potential red flags, like selective sales data. Some FDDs only show the top 20% of stores in their data instead of using total amount of stores.
2. Connect with Current Franchises
Ask for access to current franchisees listed in the FDD and communicate with them to see what their experience with the franchise has been like, if possible. This can be a great way to get real feedback about the pros and cons of opening said franchise!
Specifically, you may wish to ask about:
- Training
- Profitability
- Challenges
- Support
3. Evaluating How Supportive the Franchisor Is
We just mentioned it but it deserves its own section. After all, brand recognition aside, franchisee support is one of the main draws of choosing a franchise over opening your own business. So be sure to evaluate if the franchisor (brand) provides both initial and ongoing support to franchisees.
4. Do Your Research
Doing your own homework on opening a franchise in general as well as other things such as the following is important:
- Industry Analysis: Be sure to check out the industry and competitive landscape before jumping in with both feet
- Market Validation: Research the local market demand for the franchise in question (and others).
- Legal & Financial Advice: Consult with legal and financial professionals to discuss the feasibility of opening the franchise.
How Can We Help?
Need more help? Reach out anytime, or get answers to the most frequently asked Ellianos franchise questions now.
