How to Choose the Right Franchise: Don’t Start With Google
How to Choose the Right Franchise: Don’t Start With Google
There are two ways to approach the franchise research process. The first, a top-down approach, is to search online for franchises. The second, a bottom-up approach, is to introspect on your personal goals, skills, experience, financial position, and more, then have an expert find something that aligns with you. The second will result in significantly better outcomes than the first.
Why the Top-Down Approach Fails Most Franchise Buyers
With the top-down approach, you may read what people write on social media, rely on what comes up in Google searches, or look at “Top Franchise” lists. None of these are reliable. Many great franchise owners are too busy to be writing about their experiences on Reddit—or they simply don’t care enough to waste time on something that doesn’t bring them joy. What comes up on Google is often based on who has the best SEO or who pays the most for ads. The “Top Franchise” lists, including those from big names like Entrepreneur, are all pay-to-play. When I was the Director of Franchise Development for various franchises, I would get emails pitching me to spend thousands just to be listed on these. That means there’s no guarantee you’ll find a great franchise, and it’s almost guaranteed you won’t find the full offering of what’s out there.
What Makes the Bottom-Up Approach Better?
With the bottom-up approach, you need to spend time learning about franchising, reflecting on your skills and experiences, and having honest conversations with your spouse about long-term goals. Once you’re clear on these things, you can provide a franchise expert with the inputs they need to find a great-fit franchise. These experts are called franchise brokers, consultants, or coaches. The industry has thousands of these, but the vast majority have never owned a franchise and simply transitioned from a corporate career into franchise brokering. When you work with them, they also use a top-down approach and will present “hot” franchises—regardless of your personal skills and preferences.
A top-down approach will shoehorn you into franchises that are “hot” at the moment—i.e., selling quickly because they have a great sales and marketing team. This means you could be stepping into an unproven system, one with bad leadership, one that requires skills you don’t have, or one that doesn’t align with your long-term goals. A bottom-up approach will ensure you find franchises that match your skills, are proven to help owners reach the goals you care about, and are truly solid business models.
Good Franchise Brokers vs Bad Franchise Brokers
If you decide to go the bottom-up route, you’ll need the help of a franchise broker. To help you find a good one, I’ve outlined the difference between a good and bad broker below.
Good franchise brokers will have a shortlist of franchises in industries that are growing, that have solid financial earnings statements, are in expanding systems, and meet a variety of other key criteria. They’ll take your specifics and find the franchises they’ve pre-vetted that match your skills and give you the potential to fulfill your goals as an owner in that system. Not only that, they’ll be in your corner throughout the entire research process. Their job includes—but isn’t limited to—giving you questions to ask, educational resources, acting as a sounding board so you can know what’s normal or abnormal in franchising, offering research tools, and helping you stay focused on what matters.
Bad franchise brokers will mostly work to alleviate fears and rush you through the research process. They don’t have a pre-vetted list of franchises, and they haven’t read any part of the Franchise Disclosure Document before presenting options to you. They’ve never owned a franchise, and this brokerage may be their first business. Many franchise salespeople are slimy, and bad brokers won’t help you separate truth from the fantasy these salespeople are feeding you.
Want to Do This the Right Way?
As a quick reminder, Tracer Franchising is dedicated to offering the best franchise education, recommendations, and guidance in the industry. As a testament to that commitment, Tracer Franchising is focused on education-first consulting, backed by real tools and real research.
If you want to avoid the hype and build a franchise future that actually fits you, here are a few free resources to help:
