Researching a Franchise Online
Researching a Franchise Online
Type "franchise" into Google and you'll get 67 million hits (April 2009) -- a number that keeps growing every day. So what are the best sources? Which can you can trust to provide you with the information you want? Which ones should you avoid?
Tooting our own horn, Franchise Update Media Group's Franchising.com website is a great place to begin. The site lists hundreds of franchise brands by category, as well as industry articles on trends, sectors, and breaking news. Other sites provide similar information; we like to think ours is the best for providing you with all you need for beginning your research on which industry sector and which franchise brand is best for you.
There are many other good informational websites to use in choosing the right franchise for you. Here is a selection - by no means complete - that should give you a well-rounded perspective on both franchising in general and on specific brands you may be interested in exploring as you start out on the path to controlling your own destiny.
In addition to franchise trade magazines (FranchiseUPDATE, Multi-Unit Franchisee, Franchise World, and Franchise Times), many business magazines provide in-depth information about franchising. Two in particular offer specialized areas where they have gathered an enormous range of information on franchise brands. The sites also provide rankings, advice, and how-to sections, along with many useful links.
- USA Today
For a general interest newspaper, this site provides a surprisingly good source of information for aspiring franchisees.
Before wading into the numerous websites offering different brands for sale, apply the brakes and take the time to check out the two U.S. government sites below. They can save you a lot of grief (as well as money), as they detail the laws and regulations governing franchises. They also provide a cautionary voice, in contrast to the enthusiasm of the sales-oriented portals listed next.
- Small Business Administration
This site provides information on franchising that includes an overview, a consumer guide and instructions on purchasing, how to research brands, and what you need to prepare for franchise ownership.
- Federal Trade Commission
This site, though more legalistic than the others listed here, provides a hard-nosed look at the realities of buying a franchise, with a focus on protecting yourself and your investment.
These websites provide extensive lists of franchises for sale, grouped by categories such as industry, price range, home vs. retail, service vs. goods, and include subsectors within larger categories such as food (by type of food: chicken, burgers, pizza, etc.; or by type of service provided: fast food, fast casual, sit-down, etc.). These websites make their money from the franchisors that pay to advertise on them.
5) Franchise consultants and brokers
Working with a franchise consultant or broker is comparable to using a real estate broker: the seller pays the fee and you get free expert advice. Buyer beware: that expertise often is limited. Consultants work from a list of their franchisor clients and make money when a sale is made. And while good consultants will have your best interests in mind, regrettably, some are hustlers out to make as many sales as they can--at your expense, and even that of their franchisor clients. However, since franchisors pay them to find good candidates, consultants and brokers know that mismatching candidates with brands is a short-term game. Also, they may have their favorite brands (or brands that pay them more for a sale than others), so take their advice under advisement and speak with several sources.
Some consultants or brokers that can help you zero in on the brand that's right for you include: FranchiseExpo.com, FranChoice, FranMogul, FranNet, and The Entrepreneur's Source. FranchiseMart, started in 2007 by the United Franchise Group, takes the concept to the street, with a walk-in storefront franchise consulting service.
6) Franchisor websites
These sites are excellent for researching specific brands to learn as much as you can about them, and if their opportunity aligns with your goals. Look for minimum financial requirements (net worth, liquidity), investment and startup costs, and available territories to winnow your search before contacting any franchisors.
- Franchise Business Review
FBR is a market research company focused on measuring franchisee satisfaction based on feedback from franchisees. The information, summarized in its annual Franchise 50 annual, is intended to provide franchise buyers with real feedback on franchisee-franchisor relations--a key component in the franchise selection process.
- Franchise Research Institute
FRI was established to study and promote high standards of excellence within franchising. Its FranSurvey is an evaluative tool used to measure the quality of the franchisor-franchisee relationship (fransurvey.com).
This independent research company has been supplying objective information and analysis for the franchising sector since 1989. Services for prospective franchisees include company profile reports, industry reports, and financial performance assessments, as well as Franchise Disclosure Documents.
- Better Business Bureau
Before you contact a franchisor, it's a good idea to do a little checking with the Better Business Bureau in your area. This organization logs complaints about businesses. See if any of the brands you're considering are on their list. These sites also provide business advice and resources.
- Regional Franchise Groups
These exist in franchise hotbeds such as Atlanta, where the Southeast Franchise Forum (sefforum.com) can be a tremendous resource in learning about members' brands and franchising in general. Check your area for similar groups, or call the IFA.
- Franchise-Related Blogs
These make fascinating reading, but don't believe everything you read. Many are "seeded" with positive reviews of franchise brands (an ethical no-no, but a fact), as well as personal rants against brands. While these could provide a valuable perspective, use your own judgment in assessing their credibility and motives.
The online resources listed here are only a starting point for your research on choosing the franchise brand that's best for you. Don't be seduced - or turned off - by what you find online. It's only a first step. Once you've done your research online, take the necessary next step and contact the franchisors you're interested in learning more about. Speak with real people - not only to find the answers to your business questions, but also to get a feel for the franchise organization, and how comfortable you feel with the people you meet as you move ahead in the franchise examination process.