When you purchase a franchise, you are also purchasing that franchise’s reputation. Your name is attached to theirs. Regardless of the industry you plan to join, it's crucial to conduct thorough research. Understanding a franchise's reputation can make or break your decision to invest.
Here's a quick guide on how to research a home care business's reputation before joining the franchise.
Read Online Reviews
Before you buy a franchise, begin your research by scouring the internet for reviews. Many reviews on popular platforms, like Google or social media, are from caregivers, staff, and clients or their families. Pay attention to recurring themes and patterns in the reviews — positive and negative — to gauge the overall satisfaction level.
If you are buying an existing franchise business, this is especially important. As the new business owner, you will inherit any existing reviews instead of starting from ground zero.
Review Franchisee Satisfaction Surveys
Prospective franchisees should see if the company has conducted franchisee satisfaction surveys, and review available data. Companies like Franchise Business Review provide satisfaction reports for all franchises who have participated in their surveys. You can review Caring Senior Service's most recent satisfaction report.
Again, look for themes from franchise owners. Evaluate whether the responses align with what you are looking for in a franchise. For example, maybe you want a franchise system that has a strong network of franchisees.
Evaluate Market Presence
If you open a franchise business, you want to ensure that people can find you. The franchise's market presence will be key to ensuring that your new business gets visibility.
The best way to test the strength of a franchise brand online is to simply search for them. Google the company and their product or service. Does the brand appear at the top of search results? Is it difficult to find them?
Additionally, look for signs of other marketing efforts, like customer loyalty and competitive differentiation within the industry. Is the brand consistent across all marketing channels? Do people in the customer base recognize the brand already?
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Understand the Disclosure Document
The United States Federal Trade Commission (FTC) requires franchisors to give potential franchisees a Franchise Disclosure Document (FDD). A representative from the franchise should review this document with you. This document provides information about the business and franchise opportunity, including:
- Business experience of the franchisor
- Financial performance representation of all currently owned outlets
- List of all current owners
- Pending court actions
- How many owners have left the system in recent years
Pay attention to this information as it can give you insight into the reputation of the franchisor. Follow up with the franchisor to clarify, too. A reputable franchisor should be well informed and happy to share information on the reasons behind any failures. If an alarming percentage of franchisees have failed, consider why they failed and whether or not you want to be in their position.
Visit Current Locations
If there is a franchise location close to you, stop in to see how smoothly it runs. Chat with the employees and see if you can get honest answers on their working environment. While you're there, take time to talk to the owner if they are available.
This visit can also give you additional insight into how you might run your business. You can see the franchisor's operational model in action.
Interview Owners
As part of the discovery process, many franchisors provide contact information for existing franchisees. Talk to as many owners as possible from a variety of situations.
- Owners that have started their business in the last 12 to 18 months
- Owners who have been in the system for over 10 years
- Multi-unit owners
Getting feedback from owners in different stages of ownership can help you envision your life long term. And feedback directly from owners is one of the most direct ways of learning more about the franchisor.
Prepare a list of questions to ask about their experiences with the franchise, including initial training and support, ongoing communication with the franchisor, profitability, challenges faced, and overall satisfaction with the business model. Hearing firsthand accounts from franchisees can provide invaluable insights into the day-to-day realities of owning a franchise.
Attend a Discovery Day
Many franchisors host Discovery Days where prospective franchisees can meet with company executives, tour corporate headquarters, and learn about the franchise opportunity firsthand. Attend these events to ask questions, interact with franchisees, and get a feel for the culture and values of the franchisor. Pay attention to how the franchisor treats prospective franchisees and the level of transparency and openness they demonstrate.
Consult with Franchise Associations
There are a lot of resources that to offer information franchisees need to make educated decisions about their purchases. Reach out to these associations to gather information and perspectives from existing franchisees. They can provide candid feedback on their experiences with the franchisor, support systems, profitability, and overall satisfaction with the franchise opportunity.
You can use sites like FRANdata to find out how fast the industry you are interested in is growing. Home Care Pulse does yearly surveys on home care companies across the nation and is a wealth of information and data. And we already mentioned Franchise Business Review.
Verify Legal & Regulatory Compliance
Ensure that the franchisor is compliant with all legal and regulatory requirements governing franchising. Verify that the franchisor is registered to offer franchises in your state. Check that they have no history of legal disputes or violations of franchise laws. Consult with franchise attorneys to review the franchise agreement and ensure that your rights and interests are protected.
Consider Industry Rankings & Awards
Many franchise systems are ranked and recognized by industry publications and organizations. Consult industry rankings, awards, and accolades to gauge the reputation and credibility of the franchisor within the franchise community.
Know that some organizations give out awards for a fee. So they may not be a true indication of the company's standing. But while rankings should not be the sole determining factor, they can provide some validation of the franchise's reputation.
At Caring Senior Service, we are happy to show you the strength of our brand! Reach out today to learn more.
