What type of investigation or due diligence should you perform prior to investing in a franchise opportunity? I always tell my clients that it is important to have a full understanding of the business and the franchisor.
I believe that the relationship of the franchisor and franchisee is similar to a marriage. The franchisee and franchisor are committed to each other legally for a period of time and are dependant upon each other for their mutual success. Prior to becoming a franchisee is like the dating stage of the relationship. It is important that the individual looking to buy a franchise opportunity learn as much as possible about the franchisor.
With that in mind, I always suggest that my clients speak to as many franchisees in the franchise system as possible and even speak to former franchisees. The potential franchisee should ask questions about the support and the training that the franchisor provides. In addition, the potential franchisee should spend time garnering as much information as possible about the business itself to determine if this business is the right type of business for him or her.