Franchisees Cannot Tell Wannabees What They Really Think

A story from well-known franchise publisher, consultant and author Steve Olson inadvertently illustrates why it is extremely difficult for a franchise buyer to get a straight answer from an existing franchisee.  Olson advises franchisors to “learn what your franchise owners are saying to prospects" by recruiting more mystery franchise shoppers. He goes on to say:

I was asked to mystery shop a successful retail postal franchisee who wanted to become the area developer for his region. You would immediately think he'd pass with flying colors. Not so. When I asked this motivated owner, "If you had to do it over again, would you sign on with this franchise?" He responded, "Want to know the real answer? This is a great business, but it doesn't really matter which franchise in this industry you join. They're all pretty much the same. Who gives you the best deal and negotiates the best location is what counts." Bye-bye area development opportunity for him! [via FranchiseUpdate]

Taking away a territory would be a significant opportunity loss for a franchisee. An area development agreement is the right to develop many franchises in a designated territory, say Los Angeles, and to be remunerated for finding prospective new franchisees in that territory.

Franchisor brokers and other sellers often suggest that the best way to find out the problems of a franchise system is for wannabees to visit franchisees. But if franchise owners are penalized for saying what their franchisor doesn't agree with or want known, then how much weight should a franchise wannabee give to answers that franchise owners offer?

Apparently, not much.