-An Insider's Guide to Buying A Franchise-

The lease is now final. Rebecca and I met at the agent’s office and signed all the necessary documents and gave the landlord the lease deposit. For the next five years at least, we are now officially back in the retail business.

Tampa looms large and I have a lot to do before leaving. UPS just delivered a huge box of training manuals that Big Frog wants me to review before I get to training. I’m cramming a bit to get to their June class so I’ll have to take any material I don’t finish on the plane with me. I’ll surely find some quiet time there to get through everything.

So, for now, things are pretty much on track. Franchise contracts, lease, then training. Leaving Sunday for a week, spend a few extra days visiting family and meeting with my business partner. So far, so good.

Now that the franchise contract is signed, a lot of things will start happing and the two most important for now are site selection and preparing for training. Let’s start with site selection.

Site selection is an art unto itself and I won’t try to explain the entire process here, but if you don’t have any experience in this area, that’s OK. Most franchisors provide  plenty of assistance. They can’t very well expect to grow if they don’t. They’ll show you how to find a local commercial real estate agent, give you a list of site criteria, and guide you through the entire process.

I mentioned earlier that I’d found a site I like. I’ve contacted the landlord’s agent and scheduled to meet her at the site and look it over. And I sent the site info to the franchisor to see what they thought – they said it fit their criteria perfectly. I met with the agent, got the rent and other vitals and started working on a Letter of Intent (LOI). In my LOI I offered what I thought was a fair rent rate and suggested a few terms that would help me get off to a good start. I don’t mean to skip through this too fast but, again, the franchisor is going to be taking the lead most of the time. I’ve done it many times in a past life so, if you haven’t, rely on the franchisor for help – the lease has more liability than any document you’ll sign.

But I have to make sure I’m not overlooking anything in other areas of town. Based on the way Tucson is laid out, there are three primary areas I’d consider for a store – northwest, central and east. My current pick is central and the east side is my last pick for a store – simply not as concentrated shopping areas as the other two – so I took a drive on the northwest to see what I could find. There was only one site that was on par with my first one, but it was twice the price. Strikeout. Nothing else even came close so I’ll see if I can wrap up the deal on the original site.

After a few exchanges with the agent, we’ve come to terms. In fact I think I got a pretty good deal. The lease is coming over today and I’ll start reviewing it right away. I really suggest you use an experienced real estate attorney for this and I can recommend several to you should you ever need it.

Once the lease is signed, I’ll head to Tampa for training at Big Frog’s corporate headquarters. In the meantime, I’m already feeling the extra workload this has added to my brokerage business. Business is good, I’m not complaining – I’ll just have to deal with it. More later.

I signed my franchise contracts today. After weeks of research and due diligence, it all comes down to this. Actually, it’s all just now beginning but nothing happens until I send the contracts back to the franchisor, big fat check attached. I leave next week for training in Tampa then there’ll be a million things to get done before we open in about 90 days. No surprise - it’s pretty much what I signed up for, but a milestone nonetheless.

One important step I haven’t touched on yet is financing. And the reason I haven’t spent too much time on it is that it’s really different for everyone and therefore anything I do may or may not apply to someone else. And that’s another reason why I recommend using a franchise consultant or broker if you ever decide to get into this. They usually have experience with helping in this area and, as in my case, they may have gone through it for themselves.

I welcome any questions or comments you might have in this area. If you’d like to know more about the options available to you or to discuss the ins-and-outs of how to review the franchise contracts, drop me a line via the “Contact” tab on our web page. I’d be glad to help.

Suffice it to say, the financing needs to be lined up before you go signing any franchise agreements or paying any fees. But once financing is in place and you’ve found the franchise you think is right for you, be ready to step up and sign the check. It’s the last step in our process – DECISION!

And it feels good to have made it to this stage. All hell’s going to break loose soon and I know I’ll feel overwhelmed at times, trying to pull everything together for a successful opening. But for now, it feels good. And I’ll enjoy it while I can.

OK, we’re ready for the “Big Reveal” as they say on those reality TV shows. The franchise I’ve decided on is called Big Frog Custom T-Shirts & More, based in Tampa. There was a lot of work to do to get to this point, including:

• Contact Rick and get a current list of the franchisees.
• Review the current copy of their Franchise Disclosure Document.
• Contact a sampling of the franchisees and start learning things from their perspective.

When you’re in this stage, there are a lot of things you need to ask about, both from the franchisor and the franchisees. From training programs to territories, management structure, advertising funds, etc. That’s why we make sure we give our clients separate lists of questions to ask each. It makes sure nothing is missed and the whole process is easier.

With Big Frog, I already knew what I needed to know about the franchisor. I’d recently helped my Houston client with his Big Frog purchase. Then I got on the phone with a sampling of their franchisees and found out what I could about their experiences, their sales, and the key expense items. As I did this, I entered the data info into a spreadsheet and began building my own set of projections. I’ll use this to project my profits but also as a tool for any funding I might seek.

Enough for now. The suspense is over and I still have a lot to do.

So, a T-Shirt franchise eh? Yeah, I know what you’re thinking. But bear with me a bit.

There’s a little bit of a story behind how this franchise came to be. Remember my partner, Rick Shampaine, who’s in Tampa? Well, he got a call a few years back from a banker friend who mentioned that he knew of a company that he thought Rick could help. When Rick asked what kind of business it was, he was less than excited to hear it was a t-shirt shop! His first impression was of the old, tired concept of a store full of the heat press decals, the ones that would flake off after a few washings. 

After a bit of prodding from his friend, Rick finally agreed to meet with the company and only then did he discover that they really did have something unique. They had created a retail business around a new ink-jet printing technology that, until then, had only been picked up by a few screen printers and wholesalers who really hadn’t done much toward getting it into the mainstream.  The owners were highly educated, technically proficient, had extensive business experience and, most of all, their proof-of-concept store had posted some impressive initial financial results. 

Not only did Rick help them become a franchisor, he is now their franchise development expert and has helped them grow to over a dozen stores in only a year and a half. Actually I helped a bit as I’ve sent them some clients as well. They’re now up to 14 stores and I’ll be  number 15 if I sign.

So what’s the franchise name? Whoops, my word count thingy says I’m over the limit. Actually it’s just late and I need to turn in. More tomorrow – I promise.

By now, you’ve seen this process of buying a franchise up close, closer than most ever will. You’ve heard about CONSULTATION – PRESENTATION – DUE DILIGENCE – DECISION and the way we use it to hone in on a person’s preferred business model. I’ve used this same process for myself, with the exception of the CONSULTATION part since I’d probably get some pretty funny looks from the family, sitting there talking to myself.

And I’ve made it through the PRESENTATION part, whittling down the franchises that were a close fit, finally hitting on one that may show promise. Now it’s time for the DUE DILIGENCE.

And to finally let you guys in on what the franchise is exactly.

But I promised to keep these posts short, so now’s as good a time as any to start making good on that. More later.