Advice & TipsAsk an ExpertPrevious IssuesSeptember/October 2023

Q: How do franchisees determine the perfect franchise opportunity?

With 30-plus years in franchising and helping more than 2,000 prospective franchise buyers search for their optimum franchise, I’ve seen it all. After interviewing some of the highest-performing franchisees across numerous industries for my book, The Unstoppable Franchisee, I gleaned some clues for success from the most successful franchisees.

In this article we’ll look at how successful franchisees chose their ideal franchise, so that you can apply their lessons to your own franchise search. After all, achieving optimum success in franchise ownership only happens when you choose the right business.

Highly successful people know what they want and why they want it. They are focused and intentional about how to get what they want and seek guidance from franchise brokers, accountants, and lawyers who can help them with their search. This is one of the primary reasons they turn to franchise ownership—because they get to draw on the knowledge and experience of the franchisor, and benefit from the collective intellectual capital of all the franchisees in that franchise family.

Before starting their search, they took time to assess what they could bring to the business, and what they would want their life to look like as a successful business owner. Here are some key items successful franchisees consider before they decide on a franchise opportunity:

  • Money: How much of their own funds are they comfortable with injecting into the business, and how much are they capable of borrowing?
  • Time: How many hours per week will they be able to dedicate to running the business, and what will the weekly structure of that time be? Will the business have traditional Monday-to-Friday hours or seven-days-a-week retail hours? Are they willing to be available evenings and weekends, or do they turn their phone off at 5 p.m. on the dot?
  • Transferable skills: What aspects of the business do they excel at and what should they keep doing in their new franchise? Which skills need improvement/training to effectively run their business, and what types of work do they want to avoid (if it’s a core requirement in the new business).
  • Operational and lifestyle criteria: How will the requirements of the business impact their existing lifestyle? Criteria like hours of work, number of employees, and whether the franchise is home or location-based, etc. These criteria are very important in determining a good franchise fit, since once the business is up and running, they will determine the very nature of the business and the quality of life it will provide the owner. Strong franchisees take the upfront time to identify at least 10 to 12 criteria and rank them in order of importance.
  • Financial and lifestyle goals for franchise ownership: Where the criteria above are ongoing, financial and lifestyle goals are the outcomes of running a successful business. How do they define their success? What level of income do they want to be earning once the business hits full stride (usually after one to two years)? Do they want to continue to work full-time or build a team that can eventually take over the day-to-day operations? What about their exit strategy? Do they want to build something that has substantial value they can eventually sell, or do they want to pass it down through the generations?
  • Clarity of purpose/passion: Having a business that’s closely aligned with one’s passion and purpose is essential to higher levels of success. Franchisees don’t have to love the product or service, or even use it personally, but they must have passion for the core work that it takes to get that product or service into the customers’ hands and have strong conviction in the value proposition that comes with that product or service.

Why was it so important to do this introspection work before starting the search? The more clarity the franchisees had about the elements above, the better they were able to assess which businesses could satisfy these criteria. And just as importantly, they knew what they didn’t want, so they knew what to avoid. They were quickly able to eliminate businesses that they wouldn’t enjoy managing or be effective at, even if that business had a strong brand or other appealing factors.

If you’re actively searching for a franchise and haven’t identified what you want from franchise ownership and why you want it, maybe it’s time to press pause for a few days and do some serious introspection. I can guarantee that the businesses you’re considering will look very different, and you’ll probably be surprised at which businesses are your best potential fit!

Gary Prenevost

President, Southern Ontario and Eastern Canada