Hi again from sunny Omaha! The college world series is in town. What a great event for families! We went to a game last weekend for the first time and were blown away with all of the fun stuff they had for kids.
Ok, on to business. This week’s topic is interviewing current franchisees. This is one of the most critical steps in the due diligence process for any franchise. I posted on this topic back in April and it was well received, so I thought I would expand on it a little.
Most franchises, including Right at Home, will insist that you prove that you are qualified before allowing you access to their existing franchises. They don’t do this to make the process more difficult – they do it because any franchisee’s first business priority is running their business. At Right at Home, we publish a list of qualified candidates to our franchisees every day. This keeps them informed of our development efforts, protects the integrity of our system, and protects our franchisees’ time. If you’re not on the list, they will politely refer you to me.
Like it or not, the fact is that the more the franchisee likes you, the more information he/she is likely to share. To that end here are some best practices to help you with these conversations once you enter the “validation” part of the process:
- Build rapport first. You are calling a stranger and asking them about their background, their business, and in some cases how much money they make. It’s only fair that you share this information about yourself first.
- Show respect for the franchisee’s time. They get no compensation or immediate benefit from talking with you about their business. Allowing them the chance to get off the phone after 20-25 minutes is the right thing to do. Some may not take you up on your offer, but they will appreciate the fact that you are considerate.
- Always ask the franchisee to schedule a time to talk. They are busy business owners – whenever you call, it’s probably a bad time. Scheduling a call, though, will increase the likelihood that they sit down for a few minutes and focus on talking with you about the business. We have noticed more and more franchisees responding to email requests for these calls too, so you may want to ask the franchisor for their email addresses.
- Prepare a list of questions before making any calls. Take good notes on the answers to these calls – you’ll be glad you did! Don’t insult the franchisee by asking proprietary type questions – keep them focused on day to day operations, how they spend their time, and how the business performs. Asking them to give you anything that could be considered confidential is a no-no.
- Know when you’re done and move on to the next step. Calling franchisees is fun, but it takes some time. So, figure out what’s really important for you to know and get the answers to those questions. The number of franchisees that you need to speak with in order to get comfortable varies with different personalities and different size franchise systems. But, here’s a suggestion…people have told me that after talking with several franchisees, two things happen: 1) they started hearing a lot of the same things, over and over (which is good) and 2) their questions started changing from “should I do this?” to “HOW should I do this?” When this happens, it usually means you are finished with the validation phase of the process.
When you make these calls you should know that you are beginning to build your own “personal” brand within the franchise. Being prepared, courteous, and genuine will not only lead to better and more information from the franchisees, it will serve as the basis for your relationship with the franchisees for years to come.