When choosing to buy a franchise, be careful not to fall in love with the menu, products and concept alone as the only reason to pursue your franchise dreams. For me, the people driving the brand, (the franchisors), are just as important - if not more than the concept itself. If I were you, I’d want to feel really good about the people behind the brand - not only the brand itself.

Why? There are many reasons, but one that stands out is to know whether the people behind the brand were actually the founders of the brand. Do you know how many brands are out there where those driving the company are no longer the ones who started it? Brands are often bought and sold. The motivation that drives those who have bought over brands are often not the same as those who started them. The priorities of investors who have invested and taken over brands can be very different to the priorities of those who founded the same brand before them.

The founders of brands are usually passionate about their concept, passionate about their products and also passionate about helping their franchisees succeed. They usually treat every franchisee's success or failure as if it were theirs and often go the extra mile towards helping their franchisees succeed. They see their role as the builder of their brand, and are often personally interested in what their end clients think. They are personally involved in research and development of new products and of course, they usually invest a lot of their own time with their franchisees, listening to them and yes, even learning from them.
While I am generalising, investors who buy over existing brands are usually in it for other reasons, namely “profits, quick return on their investment, dividends and exits”. To what extent are they as passionate about the success or failures of their franchisees as the founders were? Good question? This is what you need to spend your time and efforts on when choosing to buy a franchise. Who are the real people behind the brand and who are the people who will support you when you need them most in your corner?

So while I want to stress that I have to a certain extent generalised and indeed, there are many cases which are exactly the opposite of what I have described above, it’s really important to research not only the brand itself in so far as the concept,, but more importantly, the people who are in the driver's seat. True franchise success isn’t built on product innovation alone; it’s built on people, financial education for their franchisees, and an attitude of partnership with their franchisees.

Table of Contents:

1. Choose a Franchisor Who Teaches You to Make Money
2. Plan Working Capital and Cash Flow Early
3. Demand Financial Transparency and Support
4. Love the People, Not Just the Product
5. Final Thought

Choose a Franchisor Who Teaches You to Make Money

Decades ago, I believed that following the system guaranteed success. The brand had queues out the door and strong sales, but no profit. The heart of the problem? I was trained to operate a store, not a business.

A great franchisor doesn’t stop at teaching you how to make a great product. They show you how to read your Profit and Loss (P&L) statements, track Return on Investment (ROI), and calculate your Break-Even Point (BEP) - the point at which your revenue covers all your costs.

As shared in my Guide for the Franchisee, too many operators find themselves working just to pay rent, unaware of how many daily customers they actually need to hit profit. Today, I would only join a brand that teaches their franchisees exactly that how to measure performance, manage cash flow, and use key financial metrics to stay in control.

Plan Working Capital and Cash Flow Early

When opening a location, most new franchisees underestimate working capital - the buffer needed to operate before breaking even.

If I were starting over, I’d ensure I budget several months of operating capital, rather than assuming immediate profits. An experienced franchisor will insist that their franchisee’s plan for these extra funds from day one so they will avoid high-interest loans or late payments that can strangle a young business.
Cash flow awareness is more than paperwork - it’s survival. Even profitable businesses fail without it.

Demand Financial Transparency and Support

A great franchisor invests in their franchisee’s financial education and makes everything transparent. They should be transparent about what your financial model looks like what average EBITA (Earnings Before Interest, Taxes, and Amortization) you can expect, what rent percentage is sustainable, and how marketing contributions are used.

According to my Guide for the Franchisee, many brands excel at branding but neglect financial mentoring. If I started over, I’d choose a brand that supports both: product training for the customer experience and also a great deal of business training and education towards helping me become financially independent.

Love the People, Not Just the Product

Good franchisors know that their franchisees are not just operators, they are entrepreneurs in partnership with them.

If I were buying a franchise today, I’d seek leaders who invest in relationships, mentorship, and business education. These are the people who’ll challenge you to master the seven pillars of success in retail orientated franchises:

1. Customer experience
2. Product mastery
3. Team leadership and ongoing training
4. Local marketing
5. Strong administration
6. Financial education
7. Great support.

Because when the franchisor teaches you how to make money, manage costs, and think like a business owner, you’re no longer just another cog in the wheel of paying the franchisor royalties, but part of a sustainable, business community where the goal is not only for the franchisor to profit but for the whole organisation including the franchisees to profit as well. This may sound obvious and trivial, but don’t take for granted that every franchisor is only interested in your success.

Look for the franchisors who are genuinely interested in your success and can show you how they invest their time and efforts towards helping you succeed. Ask to see their training system, their operations manual, speak to other franchisees and interview them. Ask them how they were trained, how often their franchisor visits them, ask them about the transparency of the brand, to what extent they are heard, how often there are franchise meetings and educational conventions etc.

Final Thought

The best franchise decision you can make isn’t just about what brand you choose - it’s about who you choose to build your business with.

If I were buying a franchise today, I’d surround myself with people who believe that the success of the franchisee is the success of the brand.

If you liked this blog and want to have a closer look at how you to manage the finances of your franchise in what I believe to be the best and simplest way, then download my guide here.

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Thanks for reading.