A word of caution about franchise businesses is indeed good advice; and our readers are wise to heed the warning. Unfortunately not all franchise opportunities are created equal.
As the vice president of Sparkle Wash International - a pressure washing franchise that has been in business since 1965 - I have had thirteen years of experience.
What has become abundantly clear during this time is there is one sure-fire way to get a handle on the legitimacy of a franchise organization... and that is through what is known as VALIDATION CALLS.
A validation call is the act of the franchise candidate conducting telephone interviews with several existing franchisees already up and operating in the franchise system.
During this process everything comes out in the wash - good, bad and ugly. To be fair to the franchisor the candidate must understand that not all franchisees within a system are going to be in love with the franchisor - and this is to be expected.
However, after several calls the candidate will start to see a pattern emerging, and THIS will be the truth behind the franchise opportunity.
Here is how to make a validation call.
a) Introduce yourself to the franchisee
b) Tell him you're interested in opening a _____________ franchise in (your location)
Here are three important questions you will want to ask the franchisee:
1) What were you concerned about before you bought into the franchise?
2) What have you learned since?
3) Knowing what you know now, would you do it again?
Be fair to the franchisor, not all franchisees will be in love with the system - that is only to be expected.
However, are the majority of the franchisees you speak with giving you a favorable report?
Calling existing franchisees for references on the franchisor is a good idea.
But you may want to use a 3rd party to do it.
And while my opinion goes against conventional wisdom the prospective franchise buyer is too likely to not clearly hear the negatives on a validation call or get reliable & useful information.
They have already decided to buy at this stage of the process.
Cognitive Dissonance will rule the buyers emotions and any value from the validating will not be fully realized.
Many franchise brokers swear by this technique.
I have no doubt that it is effective for some - because they hear exactly what they want to hear.
Many more experienced franchise brokers disagree with me, however.