Considering Investing In A Franchise? Three Questions Help You Sort It Out

(Thursday, January 03, 2008) - I'm a strong believer in the old adage that experience
is the best teacher.
In my 20-plus years as a franchise partner for some of the
nation's largest concepts, I've learned three valuable lessons
that I offer frequently to those interested in investing in a
franchise system for the first time. Every day, I encourage our
potential Rita's Water Ice franchise partners to delve deep into
their goals while understanding these three critical points.
To ensure you're truly prepared for the life-altering and thrilling
world of franchise ownership, I recommend evaluating a franchise
partnership opportunity by considering this series of
reflective questions:
1) Do I feel a strong and genuine support of the business
principles of the franchise system and a passion to
implement these principles within my business?
2) Am I a person who can welcome change and operate with a
great deal of flexibility?
3) Can I honestly say that I have mapped out a clear long-term
vision for the future? Have I invested the proper amount of time
to learn the business, analyze it and forecast long-term challenges
and opportunities for the industry?
Lesson 1 - You gotta believe
You might "like" a concept. You might think that it's "cool,"�
"on trend," "different" or "fun." You might think that this
franchise concept could be one of the most lucrative
opportunities you've ever come across. But none of that
matters unless you believe.
It's a huge mistake to buy into a concept in which you don't
truly believe. And I mean believing in the concept with every
fiber of your being. When you truly believe in a concept, you
have absolute trust in the franchise management team and
their plans for the future. You echo every word of the mission
and vision of the system and have an inherent desire to put
those words into daily action as a franchise partner. You are
ready to sacrifice any independent business plan or notion that
doesn't fit into the franchisor's method for success. When you
wholeheartedly believe, you are synchronized with the core of
the franchise system and are willing to operate in lockstep,
placing ultimate confidence in the system.
Lesson 2 - Can you embrace change? Are you sure?
Many people think that they can "handle change," and
many soon find out that they cannot. Change is tough
and uncomfortable and a lot of hard work.
But change is a 100% absolute in the world of franchising, and
therefore, a potential franchisee can't fear it one bit. Quite
simply, the ability to embrace change is vital to one's success
as a franchise partner.
What works today in a franchise concept is often not sufficient
for continued growth tomorrow. Concepts thrive and move
forward if - and only if - they continue to evolve, respond to
their customers' behaviors, and ultimately, improve. In the
early 1970s, the Wendy's menu consisted of three hamburgers,
chili, shakes and fries. In the early 1970s, that worked.
I followed the system, and I succeeded as a partner.
We knew that while there would always be changes in
operations, the core beliefs and values of the Wendy's franchise
would always remain the same. This is one of the areas where
belief in the concept (Lesson 1) becomes invaluable.
Throughout my tenure as a Wendy's partner, the concept changed, and we knew that we needed to trust and believe while
welcoming innovations and different approaches.
There's not a long-standing concept in any industry that hasn't
undergone some sort of change, so there's no virtually point
in resisting it. And incidentally, Wendy's offers well over
50 menu items today!
Lesson 3 - Gaze into the future
Before buying a particular franchise, you must conduct
an exhaustive research and observation phase. Although uncovering
which opportunities are the most lucrative is an enjoyable
and invigorating exercise, it is really most important to assess
whether the long-term goals of the business fall in line with
your individual goals and vision for your future.
Never forget that just beyond the calculation of your initial
year-end revenues lies the larger picture of what success will
mean for your franchise far into the horizon. Gaining clarity
about what long-term potential a concept holds for you will
guide you to make the best investment decision.
I suggest starting at the beginning: Look at the longevity of the
business and its track record of success. Analyze the business
model. Understand the size of the concept and examine
its growth rate. Know the customer
psychographic and demographic and
understand their current experience
with the concept. Gain an accurate
assessment of time involvement and
personal investment. Soak it all in and
learn as much as you possibly can
about a potential partner.
This phase can be overwhelming and
arduous, but that's a good thing. That
means you've put in the time and the
work that buying a franchise requires.
However, remember that you do not
have to go at it alone. Take advantage
of the franchisor's team.
Franchising teams don't "just want to
sell you something." Franchising
teams are actively seeking business
partners. They have been guided to
be just as rigorous in selecting partners
as you should be in buying a
franchise. They should provide you
with thorough assistance and a clear
vision for the long-term potential
of the business.
Franchise partners should view
receiving help and service from their
franchise's management team as not
just an option, but a right. An
investment into the concept should give you access to the management team's expertise for
solving problems, projecting industry trends and planning
for the future. Depending on the franchisor, help from
the management team may also include operational
set-up, employee training, advertising and marketing, and
professional development opportunities. As a franchisee, you
should both expect and require this kind of attention.
Achieving success in any franchising venture obviously
requires more than three simple steps. However, using this
three-pronged checklist early in your investigation will save
you time - a valuable gift in the world of a franchise partner.
When you believe, adapt and think long-term strategy from the
beginning as a newly-minted franchisee, you'll have paved the
road well. You'll get to enjoy the exhilarating ride of first-time
franchise ownership and hopefully, miss the common
potholes that many first-time partners face.
Jim Rudolph is chairman of the board and chief executive officer of Rita's
Water Ice, the largest Italian ice concept in the nation, with more than 500
stores across 17 states. After developing and operating 47 Wendy's restaurants
in the Greater Pittsburgh area in the late 1970s, Rudolph and his brother
formed McKnight Capital Partners, a private equity firm based in Pittsburgh.
The firm purchased Rita's Water Ice in 2005 after Jim saw the potential to
increase the Rita's brand worldwide.

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