In other words, the franchise is more than a 'bright idea'. You should expect the franchisor to have operated the business profitably for sufficient time to demonstrate that its financial performance is predictable, if the system is adhered to. This should include the sales and marketing system.

 

If some very esoteric skill set is required, or a very specific marketplace, then it is unlikely that the concept is going to work well as a franchise - irrespective of how successful the franchisor is with the 'company-owned' operation. An example would be a restaurant whose reputation is built upon the personality of the owner.

 

If it is difficult for the franchisor to transfer their knowledge and expertise to a new franchisee, then your chances of enjoying a successful launch are reduced. Beware of 'complicated' concepts where franchisees have long gestation periods, before making any money.

 

In good franchise systems, there will be transparency in financial areas - prospective franchisees should not only understand how they make profit, but should also understand how the franchisor makes money - after all, in a well-structured franchise business, there should be mutual dependency between these two parties - both need the other to be profitable, otherwise the business will become unsustainable.

 

Since franchisor and franchisee are interdependent, the culture should be one of trust and mutual support. Franchisees are indepenedent business people, not employees, and franchisors who fail to recognize this, create tensions and problems in their networks - and the experience is less enjoyable for all concerned. When you speak to existing franchisees, it is worth exploring this area with them.