As all of us know, there are many great franchising opportunities available. There isn’t a person that I know that doesn’t want to be financially independent and free from a job they may dread going to every day. But with so many options, it is sometimes different to find one that is the perfect fit, not only for a persons personality but for the demographic that they live in.

Selecting a franchise is really about selecting an operation that has proven successful and that is duplicatable. There are lots of great ideas for businesses, but if those businesses are tied to a personality or to the “gut instinct” of the business owner, that doesn’t mean that there is value in trying to repeat it. And if you can’t repeat it, it’s not franchise material.

So, what are the criteria that a person would use in finding a good opportunity that is worth pursuing? Let me try to spell out some of those for you here and give some criteria to kick the tires on a company.

What’s Your Tipple?

Sounds like a very personal question … I had no idea what it meant either the first time one of my UK friends asked me. A tipple is specifically a preference in a drink, but for our purposes we’ll limit the question to preferences in general. Every person has something they want to spend their time doing, and certainly when you are looking at franchise opportunities you don’t want to corner yourself into a business that you don’t enjoy. There are many great resources that segment these industries for you. I like to use sites like FranchiseHelp and FranchiseDirect. They offer free information based on business segment, as well as specifics about the companies themselves.

The Criteria

Once you’ve found an industry that you like and a company that intrigues you, the next step is to ask all the right questions. I speak with people all day long that have interest in franchises (disclaimer: I’m the Franchise Director for a Coffee Company) and I find that many people don’t even know where to begin in their research. Here are some basic questions that you want to get answered from the onset.

Does the company you are looking at:

• Show financials that reflect a positive profit curve? Are they making money, and can you see how that profit is increasing over time?
• Being sued by anyone?
• Have a great brand that customers attach themselves to? Remember, new franchises aren’t going to be known nationally, so in that case find out what their reputation is with the communities that they are in.
• Provide great initial and ongoing training? Ask to see what their training involves, what the schedule looks like, and who is doing the training.
• Provide great support? How do they support their franchisees, are they accessible, and do other franchise owners value that support?
• Have a strategic marketing system? Nearly all companies market, but you should ask to see the ‘system’ about how and why they do what they do. Marketing costs money, and generally you will have to contribute to the advertising fund, so its good to know where those dollars will be spent on national and local campaigns.
• Invest any time or resources in helping you to find or secure a location for your new franchise?
• Have contractors or other companies they could recommend for your buildout (if applicable)?
• Supply detailed itemizations about the investment requirements so that you can get a granular view on what the total investment is and what that will be spent on?
• Have a built in vendor network that will help supply you? Do they make those relations available directly to you or do you have to go through the company?
• Have transparency about how they make their money off of the franchise owner? Is it only through royalties, or are their other incentives (i.e. vendor kickbacks) that they are getting when they supply equipment and resources. Remember, its ok for franchisors to have those relationships, but its critical that they are transparent with a franchisee about that as well.
• Provide a good structure for your own local advertising, set the budgets and provide guidance on how to use those funds?

Answering these and other questions will give you a very, very solid foothold on finding a good company to work with. Make sure to ask as many questions as possible, request meetings with the owner and know that owning a franchise is as much about relationship and trust as it is about making money.