You have defined your personal and professional goals and decided to embark on the franchise adventure. It remains to choose a sector of activity. Not so simple when you know that in France there are 75 different ones, deployed through 1,972 networks. Here are some valuable tips, with specialist lawyer Charlotte Bellet.
L’Express: When a franchisee signs up with a brand, he first chooses a sector of activity. How not to be mistaken?
Charlotte Bellet: By confronting the reality of this activity. Being a florist, for example, means carrying 10-litre buckets and getting up at 4 am several times a week to go to Rungis. Opening a restaurant requires physical energy and leadership skills. This is why I always advise candidates to spend at least a day with a professional to see what their job is all about. They will realize that a business is not only about selling: it is also about supervision and management, the two areas in which new entrepreneurs encounter the most difficulties.
Then comes the time to choose your network. Again, how to proceed?
By not hesitating to investigate: the franchisors’ website, the specialized press and the Franchise Expo trade show allow you to gather a lot of information on the concept, its cost (entry fee, brand and communication royalties) and its performance ( turnover, return on investment). And you have to go beyond what the franchisor communicates to you. Before even contacting the brands that interest you, ask yourself two essential questions: is the concept still in tune with the times? Does the territorial network still leave interesting catchment areas?
“Don’t put your family and property at risk”
Is it finally time to contact a brand?
Yes, but not just one! You have to contact several of them and go through the selection process with at least two of them: the information given by one will clarify the answers of the other and allow you to keep a step back. It is important to be enthusiastic when you start, but this enthusiasm must be kept under control throughout the journey. You are about to commit all or part of your assets to this project: you must do so with hindsight, without putting your family and your property at risk.
What questions to discuss with the franchisor?
The latter must imperatively send you the following information: the last two balance sheets of the brand, the performance of the pilot point of sale (turnover, result, margin, payroll), turnover over the last 10 years (and not only of the last 12 months, as provided for by the Doubin law), indicating the causes of the closures. Other information to communicate to you: the average turnover of the network as well as – this is crucial – the highest and the lowest. All of these elements will allow you to understand the brand’s performance in all cases: on the best locations as well as on the worst, during the first year of operation and at cruising speed.
What if the franchisor replies that this information is confidential?
Run away ! Indeed, a franchisor does not have the right to communicate to you the balance sheet of a particular franchisee. But it can send you the turnover and the average margin depending on the size of the customer base. This transparency is absolutely essential.
An article from the “Franchise” special issue of L’Express. On sale since March 16.