Christopher Conner, President of Franchise Marketing Systems, presented on the topic to a group of 30 attendees on the relevant entrepreneur question for anyone considering a franchise investment. The discussion started with an opening question to the group, "as you walk the floor, the question you should be asking yourself as you interview each franchisor is whether you can do this yourself and what value would the franchise offer to you that you couldn't do on your own?" For anyone involved in franchise development, certainly this is a question that is broached frequently by potential buyers who are trying to determine what the value proposition of a franchise brand is and whether the fees are warranted.
Mr. Conner pointed out that someone who makes a good entrepreneur is not necessarily a good franchisee and vice versa. Traits associated with entrepreneurs tend to be a higher degree of creativity, wanting to put your own stamp on things, ego-driven, difficulty following rules and a variety of other tendencies. Whereas a solid franchise candidate will be someone who exhibits traits more closely aligned with a successful employee such as job continuity, good grades and a rule follower. The discussion then took the discussion into a progression of steps that someone might take in considering a new business investment. The first step in this process was to do an honest self-evaluation and decide what your personal value proposition is to the market.
The business review should start by researching markets and understanding where there is opportunity for growth. Writing a simple business plan with a SWOT analysis and market comparison would then allow the investor to consider all options and understand where the business model fit into the market. Once this plan was in place, capital requirements, market analysis and a business strategy would help clear the path for which business might make the most sense.
Should that strategy take you into franchising, the questions to ask a potential franchisor should be aimed at determining whether a franchisor is geared for "awarding" franchises or "selling" them. The key to a positive franchisor-franchisee relationship as Mr. Conner stated started with the franchisor's focus and whether their passion was for the transaction or the success of the relationship. The FDD offers significant insight into these questions and would provide the content needed for a potential franchisee to avoid costly mistakes and make better business decisions.
Christopher Conner wrapped the presentation with a series of comments focusing on a potential entrepreneur's understanding for how capital requirements worked and having a complete commitment to whatever business they chose to start working on.
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