Did you know that a new McDonald’s franchise costs over a million dollars and there is a 2-year waiting list? Did you also know that, on average, when a prospective franchisee contacts numerous franchise companies, the first person to call back typically gets the sale 67% of the time?
I remember talking to a candidate who was more excited to visit another concept because he was willing to fly with his entire family for the weekend. When I searched the web, this company had numerous laws and hadn’t had a franchise sale in several months. “Fool’s gold” I call it. When a company walks, it talks and acts like gold but in reality it is not. Desperation moves many franchise organizations to give it away. You must stop and realize that nothing is free. Why is this company doing this? They are in trouble?
Ask them about litigation. How many stores did this business open and close in the past year? How many stores are open? Is it worth offering it for free? Do you go to McDonalds, Subway or other organizations that discount the brand to sell it?
When you’re thinking you’re a good negotiator and you’ve just landed a great deal, check again. After attending a recent IFA show, an industry consultant told me, “Look, twenty percent of these companies may not be in business next year.”
That’s an alarming statistic, although I have no way of verifying it. What happens to those poor people who spent a lifetime’s savings on that brand only to end up with that mom and dad name at the end? So the next time someone aggressively calls non-stop and uses urgent tactics against you and offers themselves to you and your aunt, uncles and closest relatives for free, ask yourself if this is real or dumb.