Well, congratulations, you’ve gone directly to the most important question, and you didn’t even “Pass Go and Collect $200”.  And you’re thinking, “Of course that’s my first question, I’m not looking for a Franchise so I can save the whale.  I’m doing this to MAKE MONEY!!”

So, you return to the essential question, “How Much Money Can I Make with YOUR Franchise”.    And the game of “cat & mouse” begins.  You see, although this is the question you most want to ask……it’s also the question that the Franchise most wants to avoid.

Why?  Read on, because this is something you need to understand.

The most basic explanation of why Franchisers cannot tell you what you’ll make is that they simply CANNOT KNOW what you’ll make, and they last thing a Franchisor wants is for you to have unfair expectations of how you’ll do.  In addition to the moral issues of making realistic representations and “keepin’ it real”, the Government takes this matter very seriously.  The Federal Trade Commission (The F.T.C.) has very tight guidelines for what a Franchisor can and cannot disclose to a perspective Franchisee.  That makes it impossible for Franchisors to share any performance directly with Franchise-seekers.  That protects everyone from the emotions, disappointments and yes, ridiculous lawsuits that results from Franchisees not making the money they expected to make.  And all legitimate Franchises comply with this law.  Some Franchises may provide an Earnings Claim in their FDD (as specified by the F.T.C.), but you’ll notice in the small-print that these calculations are mostly manipulated (albeit legal) to make the Franchise look good.  I recommend that you take all Earnings Claims with a grain-of-salt.

Most Franchises have strong historical data and could show you how other Franchisees perform in similar locations with similar demographics, but they can’t even do that.  Why?  Because once you’re open, the Franchise can never be sure what happens after they leave.  Perhaps the Franchisee is not quite the operator that everyone expected,  Will they follow Company standards consistently, offer stellar customer service, hire a capable staff, portion correctly, conduct local marketing and keep your business clean & orderly?  Most Franchisees do, but some don’t.  Yes, the Franchise will monitor your store at intervals and compel you to uphold standards, but (incredibly) I’ve seen more than a few Franchisees dodge Company standards and ignore the need to market their business.  Or perhaps the operation is stellar, but the demographics around the business change significantly or perhaps a strong competitor (or three) opens in the area.  That’s why a Franchise cannot predict how a Franchisee will perform.  There are just too many variables.

And the most important variable in Franchising and the key to success is the Franchisee’s level of passion, commitment to standards and determination to building sales are the keys to success.  What is your level of passion?   Are you willing to commit yourself 100% to the Brand, the Franchise Team and marketing your business?  Will you LOVE the customer and offer stellar service?  When you KNOW how you’ll perform, it’s much easier to predict how your store will perform.  The Franchise cannot know this because there will never be a Crystal Ball……it’s all up to you.

If you’re convinced that you will be an awesome Franchisee, then it’s time to ask, “How much money can I make with YOUR Franchise?”  Now, you’re talking!  There ARE definitive ways that you can project how you will perform, and it’s critical that you pursue this so you can determine if the Franchise you’re looking at can bring you the financial returns you’re looking for.  So, how can get this information?  Be relentless by doing the following:  Call current Franchisees, call Franchisees who have sold their stores in the last two years, closely examine any Earnings Claims that the Company does make (but with a grain of salt), and keep asking the Franchisee questions about performance measures (i.e. food & labor cost Goals, average store volume, volume by daypart, breakeven volume, operating costs, etc.).  As mentioned, Franchises are not allowed to make performance representations, but you CANNOT proceed with confidence until you have a fair idea of how the Franchise will perform.  Hey, who’s going to place their family’s financial future on-the-line purely on faith alone - you need numbers!.  So keep pushing for the answers because despite all the government restrictions, you CAN get this information if you know what you’re looking for.  And if you have any questions about that, just let me know.  The Franchise Coach is here for you.