Before investing in a franchise, you should take time to thoroughly evaluate the opportunity and determine whether a specific franchise aligns with your goals, values, and capabilities.

• Start by exploring the industry and the services or products being sold. Once you find the category that interests you, go deeper into the different brands and research what sets one brand apart from another.
• Consider whether the franchise is emerging, growing, established, or mature. Each stage offers different levels of risk and support. What locations are available to you? Decide if you plan to stick with one location or expand into multiple locations.
• Gain an understanding of the structure of the organization: Does it offer depth in training, systems, and leadership? Where would you fit with the franchisor?
• Assess the franchisee profile: How long as the brand been in business? Is there high turnover? Does the brand show stability and long-term success?

Success depends on alignment; your personal vision should match the franchise’s mission. These factors will help you determine whether the opportunity is a good fit for your vision and business style. CorporateConnections® believes in connecting leaders around the world and empowering them to create opportunities and meaningful change in their organizations, communities, and lives. If those words resonate with you, owning a strategic business networking organization may be the right type of franchise business for you.

Doing Your Due Diligence

The Franchise Disclosure Document (FDD) will answer many of your questions, but speaking with current franchisees can give you real-world insights into the brand’s culture, support systems, and financial performance. In your research, identify current franchisees you can reach out to and ask specific questions about the opportunity. Consider asking:

• What made you choose this franchise over others?
• How was your onboarding and training experience?
• What kind of support do you receive from the franchisor now?
• How long did it take you to become profitable?
• How well does the franchisor’s system work in day-to-day operations?
• Have you encountered any challenges with supply chains or technology?
• How responsive is the corporate team when issues arise?
• Were your startup costs in line with what was disclosed?
• Are the royalty and marketing fees reasonable for the value you receive?
• Would you say the business meets your financial expectations?
• Is there a strong sense of community among franchisees?
• Do you feel supported by your peers in the network?
• Are there opportunities to collaborate or share best practices?
• If you could go back, would you make the same decision?
• What do you wish you had known before signing the agreement?
• What advice would you give to someone considering this franchise?

CorporateConnections’ franchisees come from varied backgrounds but what they all have in common is a desire to bring business leaders together and offer a support system and platform for higher level opportunity generation. They understand the importance of connecting business leaders and the impact those relationships can have in their markets.

Understanding the Financials

With all franchises, there are upfront and ongoing costs you need to consider as you research potential options.

Franchisee Fee: All franchises require a franchise fee, a one-time payment made when purchasing the franchise. These fees vary based on the franchise and provide you with the right to operate under the brand name.

Startup Costs: Depending on the franchise, startup costs will vary based on the need for equipment, office/retail space, inventory, technology, and more.

Royalty Fees: Royalty fees are reoccurring payments made to the franchisor that allow you to continue operating under the brand. These fees are usually based on a percentage of revenue and are used to provide you with ongoing support such as marketing and training.

Ongoing Costs: What will it take monthly or yearly to continuously operate your business? A franchise that requires inventory will likely have higher annual costs than one that offers a service.

When considering the profit potential, look at the upfront and annual costs in operating the franchise and compare that to the average revenue the franchisees generate based on information in the FDD.

With a franchise model like CorporateConnections, the startup fees seem with a brick and mortar franchise are eliminated but other considerations need to be worked through, including whether you will rent office space or work from a spaced working space. You will need to think about the team you will hire to get the business off the ground—and whether that team will be contractors or full-time employees. The franchisor will provide guidance and input on what has worked with others and will provide tools and training to help you launch your franchise as quickly as possible.

Legal & Contractual Aspects

During your decision process, you will want to thoroughly review the Franchise Disclosure Document (FDD) and the franchise agreement before proceeding with your investment.

The FDD, which is provided in advance of the franchise agreement, gives detailed information on the franchising opportunity. It shares specifics about the franchisor and its history as well as the experience of the executive team leading the franchise system. It also explores all financial requirements, territory rights, trademarks, and renewal terms. You should review this document with an attorney and ask questions to the franchisor as they come up.

The franchise agreement is your official contract that lays out your rights and obligations to the franchisor. The details within this agreement reiterate much of what was included in the FDD and lays out the terms and conditions to which you agree. This document is legally binding.

After reviewing these documents and talking to various parties, you should have enough preliminary information to take the first step in your franchising journey. It’s time now to fill out an application and start on your road toward business ownership.