Answers

Q: I have done months of research and attended numerous franchise exhibitions and am in a bit of a dilemma. I have narrowed done my list of potential franchises to invest in to two. One has a well-established network of franchisees, the other is just about to launch its franchise programme, and is looking for its first franchisee. So I would, in effect, be a guinea pig. I have had extensive meetings with both, but wondered what the experts thought was the best choice?

Peter Williams: There is never a simple formula in deciding the best option. Choosing a franchise is essentially an individual matter, depending on how well you believe you are suited to a particular business, taking into account a number of key issues.
With an established franchise network, appraising the possibilities is made easier because to help you form an opinion, you should be able to speak with existing franchisees, whereas a pilot scheme requires much more consideration.
Coincidentally, last month I met someone who had faced the same dilemma and he decided to become the first franchisee of what may well become a major brand. Before deciding to go ahead he did all the right things: taking legal advice on the franchise agreement, examining his franchisor's offering carefully, evaluating their practical experience and potential ability to fulfil all their training and support obligations. Most importantly, he also scrutinised the illustrative financial projections that were based on the franchisor's core business and satisfied himself that they were not only realistic, but relevant in relation to the demographics of the area in which he would operate.
To aid your decision process, I recommend you apply a similar test and check that your proposed operating territory is comparable with the developments that your prospective franchisor has undertaken thus far.

As to being a 'guinea pig', bear in mind that a new franchisor aiming for sound growth tends to regard the first franchisee as especially important, because he or she is likely to become a point of referral to other interested parties. Therefore, although specific guarantees are unlikely, the chances of significant success might actually be enhanced.