Reading between the lines…
Sally Anne Butters, Director of Media at Coconut Creatives, points out important content franchise prospectuses should contain
You know you want a holiday in Portugal in a private villa so you go online, narrow your search down to three places – your dates are available and they have some good reviews – so you ask them to send you brochures. They arrive and are full of wonderful photos of the villa and surrounding area, so you decide on the mid-range priced one.
Three months later you arrive to find that there are roadworks going on just outside your villa waking you up at 7am every day. You always had that niggling feeling in the back of your mind that this might happen.
That feeling arises every time someone makes a large purchase, whether it’s buying a house, a car and, of course, when choosing a new business.
So how do you avoid those niggling doubts when looking at a franchise prospectus – is it just like that holiday brochure after all?
First of all, you should be aware that when you first enquire, the franchisor might not send you their full prospectus; it may actually be an abbreviated overview highlighting the key benefits of the franchise.
This is completely normal. Remember they get hundreds of enquiries a year and sending a 20-page prospectus can overwhelm some people with unnecessary details at such an early stage.
Secondly, you should remember a prospectus is a document that has been constructed by the franchisor so it will communicate what they want to say, not necessarily what you need to know. Prepare by writing a list of questions and then, as they are addressed in a prospectus, you can tick them off.
Look for the following in a prospectus:
- Franchise owner testimonials
- Customer testimonials
- Information about the market need for the core business
- Information about how the franchisor supports its franchise owners
- Attributes that would make an ideal franchise owner
- Financial examples of the investment and return
- Photos that back up all of this that haven’t been bought from a picture library
Some of my favourite additions to a prospectus are:
- Frequently asked questions – these can be a great overview of the whole prospectus.
- ‘A day in the life of’ case study – you will get an idea of the common tasks involved in running your franchise.
- A link to a franchise video hosted online – you can really get a vibe for the franchise team and whether they seem like people that you want to do business with.
There are some things to consider about a prospectus:
- If you haven’t been sent it directly from the franchisor, it might not be the latest version.
- The content in a prospectus is not an exhaustive account of the franchise opportunity.
- Any marketing collateral is not a contract, it is an invitation to purchase with restrictions implied – such as the qualities that they are looking for in a franchise owner.
At the end of most prospectuses, you will find a ‘next steps’ section where you are invited to get in touch or join the franchisor on a discovery day or one-to-one meeting. This is your chance to complete your due diligence – no one else will do it for you.
- Send your questions prior to the meeting so that data can be gathered to provide evidence.
- Ask for a full list of franchise owners so you can choose who you will contact for feedback.
Finally, a franchisor should make you feel that this is an open, honest and transparent relationship forming the basis of what could be a long-term business alliance – something you just can’t get from a prospectus.