How to tell a ‘good franchise’

Rhiannon Simcocks | CEO | James Home Services Australia

I was recently a guest on ‘The Financial Freedom Secrets Show’ podcast hosted by Jackson Millan; the Wealth Mentor.

We talked about how to create wealth from your business, and the challenges and opportunities right now in franchising, and in the home services sector.

Jackson asked such great questions and we really dove into the conversation from the perspective of ‘what do you need to know if your considering a franchise’. One of the questions he asked me was ‘How can you tell a ‘good franchise’’, and it’s a question worth revisiting, and expanding on the answer I gave. 

So, here are the five things you should look for as your indicators that you’re enquiring with a ‘good’ franchise network.

1. They show interest in you, not the sale

When you enquire about joining a franchise, you should be contacted by a ‘sales’ person or ‘business development’ person. They should then be the person to step you through the process of your enquiry. You should get the feeling that they are interested in you. In your business goals, in your background, in your family circumstances, in your objectives and in your concerns. If you ever feel like your being ‘pushed’ or that you’re a number, or that they are just racing through the conversation to get you closer to signing on the dotted line, then that’s a big red flag.

In our network, there’s not one single person who receives a ‘bonus’ when a franchise is sold. And there’s a very simple reason for it; we’re not looking for growth for the sake of numbers. We want the right people in our network, who have business goals that we can support, who have the kind of attitude we can work alongside effectively and who display the characteristics we are looking for in our business owners. If volume of sales is rewarded, then suddenly, you start to get the wrong people joining the James team.

We want to learn about you, so we can honestly appraise whether our network is a fit for you and your goals. Because if we feel it’s not, we’ll be honest with you about it.

2. A steady and logical sales process

Buying a business is not like buying a t-shirt. You don’t just walk into the shop, pick one, try it on for 30 seconds, then make your decision. There’s a lot to consider for both the potential franchisee, and the network. We have a five-step process that we step potential franchisees through when they enquire about buying a business. At any time, someone can pull out and there is never any pressure or any obligation to continue in the process. The process is designed to give you all the information you need to make an informed decision that is in your best interests, without overwhelming you.

The process takes time. It takes a matter of weeks, sometimes months.

It shouldn’t be quick.

It shouldn’t be rushed.

You should never feel pressured or overwhelmed.

And it should always be clear to you, what the next step is, if you want to keep progressing.

The path ahead, should always be defined.

If you’ve enquired with a franchise network and there is no real defined process, or you feel pressured or rushed, then take a step back. It’s an indicator that they don’t have great systems and processes. Which is a red flag. If they can’t give you confidence in their business in the initial stages of your buyer enquiry, then how are they going to support you as a business owner?

3. Open book

This is a big one! The network you’re enquiring with, should be completely open and transparent about how their network works, what your obligations are, what their obligations are, what fees are involved, what services you can deliver, what their Franchise Agreement says. And this information should be forth coming from them, not hidden in the small print for you to dig out.

We have an Information Session we take potential franchisees through as part of our sales process, and in that session, we tackle all of these things head on.

We will also be completely honest in any answers we give, to your questions.

Because it serves neither party to only share the easy topics to talk about.

And because you should be fully informed when it comes to things like your obligations and fees for example.

There are some questions we can’t directly answer, and that’s because we are regulated by Government not to answer particular questions… we cannot make any representation to you about what you can earn as a franchisee.

BUT… whilst we can’t tell you… our franchisees can… which leads to our next point!

4. Facilitate a conversation with existing franchisees

Another step in our sales process is to introduce you to several existing franchisees in our network so you can have an open discussion with them, about their experience with James.

We recognise that there comes a point, where you’ve gathered all the facts, but now you just want to speak to someone already in the network to see what its really like, and to ensure that what you’ve been told by the sales person stacks up in real life.

We make this happen!

We introduce you and facilitate an initial conversation, and then we leave it to you. You have all their contact details, and can reach out to them for further questions at any time, and we recommend you do!

We have nothing to hide.

We stand behind the support we give to our franchisees, and we want our potential franchisees to have done their due diligence on us, and had all the opportunity possible to have their questions answered.

5. A clear onboarding process, and demonstrated support

Remember how earlier I indicated there should be a clear sales process in place and you should always know what the next step is should you wish to proceed? Same goes for the onboarding process. Onboarding occurs if you go ahead and purchase your James business, then we ‘onboard’ you to transition you into the network, train you, get all your equipment organised and your business set up and ready to roll.

If you’re getting to the pointy end of the sales process, then the sales person should be talking your through what happens after you sign your Franchise Agreement.

At James, we introduce you to your Regional Manager very early in the process so you know who your business coach and point of contact will be. We introduce you to members of the Head Office team who will be involved in setting up your business. We have tasks that we will give to you to start to get your business set up, and we’ll be super clear about what we’re doing behind the scenes too.

Your training dates will start to be organised, your vehicle signage, your stationary will be custom designed just for you. There are a million things happening at this point; rest assured, we have an exhaustive list of all the things we need to do to take your business from Franchise Agreement, to operating business, and we work through all those things with you.

We also have a 10-point strategy for generating you leads for work. Some of those points, we do. Some of those points, we help you to do – things like how to talk to your family and friends about your new business so they can refer their family and friends to you as potential customers!

If you’re at the onboarding phase with a franchise, you should be receiving loads of contact from the network, and you should know exactly what the plan is at all times.

If you don’t, that’s not a good sign! Make sure, during the sales process, you ask them to outline the onboarding process. If they have a thorough plan, then that’s a great sign. If they’re a little scant on details, then take a step back and consider whether they have demonstrated enough, that they can adequately support you and your new business.

There are loads of other things that make a ‘good’ franchise, but these are my top five. There are things that I can confidently say, James Home Services, nails. We have great systems and processes, we genuinely want the best outcome for the person looking at joining our network, we are open and transparent at all times and we encourage you to do your due diligence and ‘approve’ us as your partners in business ownership.

It’s a big move! Kudos to you for considering it! I hope this article has given you the confidence, that you are armed with the right kind of information to choose the best franchise network for you.

And if you think that might be us… then we’d love to chat!