Itís the Franchise Stupid
by Ed Teixeira
Itís important that franchisors and franchise candidates focus attention on
the basic franchise operation and not get sidetracked into other areas.
Many of us can recall the phrase "It's the economy, stupid" which was
introduced by political strategist James Carville during Bill Clinton's
successful 1992 presidential campaign. It was used to keep campaign workers on
message during the 1992 election won by Clinton. The words caused me to consider
how franchisors and franchise candidates often conduct themselves during the
For example, certain franchisors use their discovery day to present a lineup
of franchisor resources with more emphasis on what they do rather than what
makes a franchisee successful. This is not to say that franchisor support and
training arenít important. This approach can prompt some franchise candidates to
focus less on the franchise operation and more on these other activities. For
their part prospective franchisees need to conduct a thorough evaluation that
includes using professional advisors. Further, the candidate needs to have a
clear understanding of how the franchise operates especially in terms of
marketing and operations.
Here are Five Areas that Should Receive Focus by both Parties:
- The profitability of the franchise operation. This may
require an Item 19 disclosure or at the very least providing
cost and expense data to a candidate that can enable them to do
a break-even calculation. If necessary have them sign an NDA.
- What attributes or traits do their successful franchisees
possess? What are the skills necessary to successfully operate
- What has been done to enhance the franchise program? New
procedures, products, services and technology?
- How does the franchisor respond to requests for assistance
and how quickly?
- Identify the key fundamentals and process needed to operate
the franchise. Are there steps to success that each franchisee
Franchisors and prospective franchisees should maintain their focus on the
operation of the franchise. Although there are other important aspects of a
franchise evaluation, attention should remain on the franchise and the keys to
success. After all, itís the franchise stupid.
© 2011 FranchiseKnowHow, LLC
Ed Teixeira is the President of FranchiseKnowHow, LLC. He can be reached at