10 Signs Before You Leap

There's been a streak of articles before the New Year giving advice on buying a franchise - look before you leap in buying a franchise, 10 Signs of a Great Franchise, and more. The franchise industry loves using bulletin points to make complex decisions somewhat simpler. These guidelines are summarized here. Entrepreneur writes about one of the first steps in deciding to buy a franchise, asking if you are franchisee material.

• Are you a people person?
• Do you like to be coached?
• Do you have access to boatloads of mullah?

• Spend at least six months doing your homework
• Match franchise concepts to your own career skills and dreams
• Hear out the unhappy campers

Bob Purvin, chairman of the American Association of Franchisees and Dealers, provides this caution on the importance of due-diligence at the Dallas News:

"The industry positions franchising as a way to buy that golden dream, a way not to fail. But that seductive premise is only true under two conditions: if you buy a franchise that's already demonstrated its value, and if the franchise system has adopted a culture that respects the interests of its franchise owner. Unfortunately, there are relatively few franchise systems that meet both conditions."

How do you know you've found the right franchise? Thanks to FranChoice's CEO Jeff Elgin, MSNBC/Entrpreneur reports on 10 Signs of a Great Franchise. A great franchise system should:

1. Be responsive during your investigation process
2. Have direct operational training that is relevent to get you successfully started
3. Have strong ongoing training in addition to direct operational training
4. Provide strong marketing programs that build and maintain a sufficient customer base
5. Provide real estate assistance in finding locations, negotiating leases, supervising general contractors, et al.
6. Pave the way for franchisees in providing a way to finance, pre-negotiated vendor relationships or standard business planning templates
7. Have a history of minimal litigation (although some is expected)
8. Have audited financial statements in the UFOC that show a strong and profitable franchisor
9. Provides a system in which individual franchise units the ability to earn a reasonable return on their investment
10. Most importantly -- satisfied franchisees