“Do’s” and “Don’t’s” for the 1st Time Franchisee


For many who are looking to get into the restaurant business, becoming a franchisee is an attractive option, since most of the initial legwork is done for you. Would you believe that, for as many franchise locations there are around the world, that less than five percent of those who apply to be a franchisee get accepted and granted permission to purchase a unit? Just to put that into perspective, the acceptance rate at Princeton and Harvard, the top Ivy League colleges, is at eight and six percent, respectively. While there are instances of those who simply lose interest and cease following through on the purchase, many times, the franchisee simply fails to impress the franchising team at the brand’s corporate headquarters. Before embarking down the difficult path to becoming a franchisee, consider some of these “Do’s” and “Don’t’s” for along the way.

Do Your Research

While it is true that you should love your career, that love that you show may not be reciprocated by the community where you wish to purchase a franchise. When an opportunity to franchise presents itself to you, be sure to ensure that the franchise provides turnkey operations, and has a proven track record in similar demographics to ensure the success of the venture.

Don’t Be the Ketchup

When choosing a franchise, you want to avoid getting involved in one that may become commoditized. Look for a business with a concept that keys in on consumer experiences and can deliver a unique, memorable experience that another business isn’t able to replicate.

Do Look to Give Back

Franchises that place a high value on giving back to the community, whether it is through volunteering, charity events, or local youth sports sponsorship, can develop a place within the community where they make a difference. Customers do notice when a new business in town is living up to their social responsibilities, and they acknowledge this by coming into your franchise locations and spending more money.

Don’t Skip Through Disclosures

The Franchise Disclosure Document is a very vital piece of information for any prospective franchisee. The information within this document outlines how and when the franchisee is protected when unknown variables occur.

Do Develop Your Own Business Plan

Sure, the corporation will provide you with tools that should help you succeed, but to truly make the business your own, and to drive profits with your smarts and know how, it takes significant strategic planning on the franchisee’s end. Not only will this plan help you to build your franchise, but it will also help you track progress and understand where the business is and where it needs to be.

Don’t Rush It

A reputable franchisor should always be willing to proceed through the process at your speed, and not pressure you to complete the deal under their “time crunch.” Beware of corporations that implement a “hot box” tactic to rush you through the franchise process, and possibly into a very unfavorable situation for you that was overlooked in the chaos.

Do Ask for a “Try Out”

Some franchises make an internship or a short visit to their corporate training center a mandatory portion of the franchisee process. Being able to see how the business operates from a upper level, as well as learning directly from corporate employees, gives the potential franchisee an inside look at the people that he will be reporting to. Moe’s Southwest Grill president Paul Damico says “The people who come to visit us end up signing a franchise deal 99 percent of the time.”

Don’t Forget to CYA

When you become a franchisee, you become a small piece of a big machine. There is not always going to be someone ready to answer your questions or pick up your calls. Be sure to go over all documents and contracts with a business lawyer, as well as look over insurance policies with an insurance professional like RPA. When you are completely certain that everything is covered and you’re getting a fair deal, then break out the pen to sign on the dotted line.