At this stage of the process, you would have worked with a FranUSA consultant to develop a profile of the type of business that fits your distinct model. Now, you are focusing on specific franchise business that match your preferences and desires. Having established what you want out of your future business, now you must begin the process of investigating whether or not a specific franchise opportunity is a perfect for you.

Evaluation Overview

One of the most important things to keep in mind is that investigating a franchise is a process of mutual evaluation. You are evaluating the franchise based on how it will fit your goals and desires. The franshisor is also evaluating you to see if you are a good fit for them.

Throughout this process, you will want to structure your evaluation so that you ask as many questions as you feel you need to in order to thoroughly evaluate your options. The franchisee's relationship with the franchisor is like a partnership. It's important for both parties to find the right match. Your FranUSA consultant can provide some sample questions to help get you started.

The First Step - Obtain General Information

Contacting the franchisor will generally generate an information package about their opportunity, along with marketing materials, brochures and possibly a video or DVD. This is the general information gathering stage of the process and the franchisor will want some information from you also.

The Second Step - The UFOC

If you are still mutually interested in advancing the conversation, you will want to obtain a copy of the Uniform Franchise Offer Circular from the franchisor. This is an FTC mandated disclosure document and provides a tremendous amount of information about the franchisor. The UFOC is a standardized document and will contain information like the franchisor's history, company officers and directors, a complete description of the business, costs and fees, mutual obligations of both the franchisor and franchisee, relevant legal history and much more.

An important piece of the UFOC is the listing of other franchisees - some of whom you will want to interview before making a decision. You will need to thoroughly review the UFOC and make a list of any questions you have for the franchisor. It is recommended that you have an outside advisor review any material that you do not understand.

The UFOC does have a place where the franchisor can list any earnings claims, although it is not required for them to do so. Even if it is listed in the UFOC, you will want to discuss this with other franchisees during your investigation process.

The Third Step - Franchisee Calls and/or Visits

The most valuable step in your investigation process will be speaking to other franchisees. You will want to call or visit a number of existing franchisees during your data gathering. Your FranUSA consultant can suggest questions for you to use when beginning this step, but, it is important that you make a list of what is important for you to know.

In most every franchise network you will have franchisees who are happy and those who are not. You will want to speak to both to learn more about their business and their experiences. Gathering a wide variety of feedback from your franchisee investigation will be important. When listening to those franchisees who are happy and successful you will need to see how their approach to the business will relate to yours. The same holds true for those who are unhappy. If you better identify with the positive franchisees, then this could be the right opportunity for you. If you find you are more like the person who is not happy, this might not be the right fit.

Important areas to cover during your investigation with franchisees:

• Training - Initial and Ongoing
• Support - Initial and Ongoing
• Marketing Programs
• Advertising Programs
• Franchisee Costs (beyond the franchise fees)
• Buying Power (supply costs)
• Earnings

The last item mentioned - earnings - can be a personal topic that some are reluctant to discuss with strangers. Many franchisees will feel more comfortable sharing this information with you after you have established some rapport with them. They will likely be able to relate to your position and understand why you are asking. Throughout this step in the process, it will be important for you to determine how long it takes for a single unit to start making money and how much money can that unit make after it is established.

The Fourth Step - Visit the Franchisor

Arrange to visit the home office of the franchisor. You will want to arrange to have meetings with all of the key players - top management, all the departments, training, accounting, and operations. Many franchisors facilitate these days by holding what they call "Discovery Days". Discovery Days are structured events where you typically have the opportunity to meet all the key people involved in the franchise. Make sure that any remaining questions or issues you have are addressed at this meeting.

The Fifth Step - Making A Decision

If you have followed all of the other five steps in the process, then you can be confident that you have carried out an intelligent and diligent investigation. Now it is time to make a decision. If this company has what you want, then do it. If it doesn't, then eliminate them and move on.