Talk to Current Franchisees First?
Lance Winslow is a fascinating guy - he was repeatedly sued by the FTC over his non franchise car washing franchise.
He tried to convert it to a mere license arrangement, which also failed.
From time to time, he shows up making good points about the FTC and the Franchise Rule.
But in this particular article, about buying a franchise, Winslow commits the cardinal sin of offering buying advice that will never work.
First, he starts off with the old chestnut about franchisors awarding franchises
"Allowing the franchisor to see if you fit on his team and allowing you to determine if you are willing to join as a franchisee."
Fit on the franchisor's team? What on earth is Lance talking about? The franchise team - the one that pays royalties for renting trademarks? The franchisees that are promised nothing in the contract after a grand opening, except at the discretion of the franchisor?
Things get worse, with more simplistic advice.
"Call up 5 or more franchisees and ask them about their experiences with the franchisor, and how they get along with;
- The Staff
- The Vendors
- The Other Franchisees
Ask them how they like the business, how much money the franchisee is making.
Ask them if they plan to stay with the company, sell their franchise or renew at the end of the term of the franchise agreement.
Do a little investigation and find out if this is a good fit for you and your future business."
How much money the franchisee is making? Yeah, any five franchisors is going to tell that a complete stranger.
If they plan to stay? Who cares, 90% of the MBE stores chose to renew as a UPS store, which appears to have been complete disaster.
How the like the business? The like the business if they are making money and what to tell a complete stranger that.
There simply are not 5 minute shorts cuts to the real work of pre-purchase investigation of a franchise.
Get professional help.
Comments
There are a couple of good forums to visit: bluemaumau.org, franchise-chat.com, and franchisepundit.com. Try asking some questions there, or here, about specific franchises.
Posted by: michael webster
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September 21, 2008 12:53 AM
I'm looking to invest into a franchise and i would like some more info or maybe some one who has already been in the game for a while.
Posted by: Carlito James | September 19, 2008 8:31 PM
Lance, your reply is in character.
Why don't you take the time to explain how I am wrong and how your program of pre investigation of a franchise purchase will work?
Because I don't think it will.
But take the time and explain why you are right.
Posted by: michael webster
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August 14, 2008 12:11 AM
Well, it seems that you have really gone out of your way to trash my personal character.
The FTC filed a total of one suit against my company, this resulted in no fine, no penalty and was settled.
Further the complaint was initiated by former franchisees who owed royalties, left the company and were using our proprietary information. So, in all that, I'd say we were in the right, the FTC was in the wrong and that is why they settled the case.
Additionally, you have violated copyright by posting my article without my links on it. Thus, I hereby question your integrity.
Posted by: Lance Winslow | August 13, 2008 10:23 PM