{"id":158,"date":"2017-06-27T09:54:09","date_gmt":"2017-06-27T09:54:09","guid":{"rendered":"http:\/\/www.speedcarwash.com\/blog\/?p=158"},"modified":"2017-09-18T09:26:10","modified_gmt":"2017-09-18T09:26:10","slug":"franchise-research","status":"publish","type":"post","link":"http:\/\/www.speedcarwash.com\/blog\/franchise-research\/","title":{"rendered":"Franchise Research: Talking to Existing Franchises"},"content":{"rendered":"

Franchise Research In Today’s World<\/h3>\n

In the hunt for a great franchise investment<\/a>, the long-time advice has been to talk to existing franchisees. There is something intrinsically valuable about talking to business owners who have already made the plunge you\u2019re considering. Their experience is certainly more independent and reliable than the enthusiastic banter delivered by the franchisor\u2019s sales representative, and the information you\u2019ll gather goes far beyond the rather clinical facts delivered in a Franchise Disclosure Document (FDD).<\/a><\/p>\n

Franchisee Information<\/strong><\/h4>\n

FDD Information on Current Franchisees. Every franchisor is required to list in Item 20 of the FDD the business contact information (names, addresses, and telephone numbers<\/a>) of all of its franchisees located in your state as of the end of the franchisor\u2019s most recent fiscal year. If the number of franchised units in a state is fewer than 100, the company also must include the contact information for franchisees based in contiguous states, and then the next closest states, until at least 100 franchised outlets are listed. Most small franchise systems simply include a national listing.<\/p>\n

Franchisee Associations<\/h4>\n

The FDD requires franchisor\u2019s to list in Item 20 contact information for all brand-specific franchisee associations of franchisees operating under the same trademark as the program described in the disclosure document.<\/p>\n

FDD Information on Former Franchisees. Some investors think that franchisees who have left a franchise system can offer the most valuable and most objective information about the franchise. The FDD provides limited contact information about former franchisees who\u2019ve left the system \u2014 and only about those who have left in the franchisor\u2019s prior fiscal year. The contact information is limited for a good reason: the privacy of these former franchisees. The FDD should show the former franchisee\u2019s name, city, and state, and current business phone number, if known. If the current business number is not known, then the franchisor may include the last known home number. Alternatively, the former franchisee may request that the FDD list an email address or post office address in lieu of a business number or home number, so don\u2019t be surprised if the information on former owners seems a bit sketchy.<\/p>\n

<\/h4>\n

Caution:<\/h5>\n

Plants and Shills. The Amended FTC Rule expressly prohibits the use of \u201cfictitious references,\u201d or what it calls \u201cshills.\u201d Even if the people to whom you are referred are actual franchise owners, as opposed to fraudulent stand-ins, you want to make sure you talk to a good sampling of franchisees, not just one or two that are handpicked by the franchisor. A better move: Choose your own franchisees to call on using the contact information in the FDD.<\/p>\n

Caution:<\/h5>\n

Referral Payments. It\u2019s not uncommon for the franchisor to offer referral payment\/commission payment\/thank-you benefits to existing franchisees who refer prospects who subsequently purchase the franchise. Since most of these payments are in the modest $1,000 to $2,000 range, they\u2019re not likely to create a substantial bias or motivation to mislead you; however, it\u2019s still good to know who will benefit if you decide to buy into the franchise. A description of referral payments may or may not be included in the FDD. Ask the franchisees you talk to whether they will receive any benefit if you buy the franchise.<\/p>\n

Questions to Ask<\/a><\/h4>\n

In a busy franchise system that is attracting the attention of a sizable number of prospects, existing franchisees can receive a large number of cold calls from people wanting to ask questions. Therefore, it\u2019s important to keep in mind that you want to minimize the interruption of your call and\/or visit. This may mean proposing to meet over a cup of coffee before the franchise starts a business; it may mean talking on the phone at a convenient hour. Always be polite. Ask what would be most convenient for the franchise owner.<\/p>\n

Some key questions to ask a franchise:<\/strong><\/a><\/h4>\n

Did you find the training valuable, and how well did it prepare you to operate this business?
\nTell me about the franchisor and the support it provides. Would you say the company is always supportive of its franchisees? What grade would you give the company?
\nWhat surprised you when you got into this business, and what did you find especially pleasing about it?
\nCan you tell me about the revenues generated by your business in the last few years? How have you managed to cope with the recession? Do you plan to open additional franchise locations?
\n(And finally\u2026) If you could do it over again, would you buy into this franchise?
\nOther Franchise Resources<\/p>\n

Conclusion:-<\/h4>\n

In addition to having your own conversations with franchisees, take a look at the franchise information gathered, evaluated, graded, and posted by the Franchise Research Institute. Its surveys will give you access to a broad range of opinions from franchisees for a number of franchise systems.<\/p>\n

The advice to talk to existing owners may be slightly cliched, but its obviousness makes it no less important to your franchise decision-making process.<\/p>\n","protected":false},"excerpt":{"rendered":"

Franchise Research In Today’s World In the hunt for a great franchise investment, the long-time advice has been to talk to existing franchisees. There is something intrinsically valuable about talking to business owners who have already made the plunge you\u2019re considering. Their experience is certainly more independent and reliable than the enthusiastic banter delivered by […]<\/p>\n","protected":false},"author":1,"featured_media":314,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5,3,4,2,6],"tags":[],"yoast_head":"\nhow to do Franchise Research?- Speed car wash<\/title>\n<meta name=\"description\" content=\"The Franchise Research-measures franchise performance from the perspective of franchisees through scientific, confidential.-Get franchise knowledge.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.speedcarwash.com\/blog\/franchise-research\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"how to do Franchise Research?- Speed car wash\" \/>\n<meta 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