I consider my role as a Franchise Consultant, first and foremost, to be a teacher. To dispel the myths. To help people open their minds. To challenge their thinking. And when buying a business, one of the most important parts of the process is validating the business to determine with full confidence that it’s right for you. This can be a daunting process, but as your Franchise Consultant, it’s my job to usher you through the process and provide as much clarity and support as possible so whether you ultimately decide to say “YES!” or you decide it’s not right for you, you make that decision confidently.
Today, I welcome my longtime friend and colleague Erik Van Horn to discuss the topic of validation. Erik is the Co-Founder of Horse Power Brands, and worked alongside me as a leading Franchise Consultant with FranChoice. He understands the validation process intimately, and our conversation will provide a rare and honest insight into the MUTUAL evaluation process that precedes the purchase of a franchise business.
Erik summarizes his approach to the validation process:
“Validation to me is happy, successful franchisees and having a clear understanding of what that looks like in different brands. If your thing is to make a lot of money really fast from a cash flow standpoint, you need to validate that. If it is to build long term, large, life-changing wealth, then you need to validate that. And that’s probably two different types of of models. I pretend like I don’t know anything and nothing I see is true. And then I go and learn. But I have to know that at the end of the day, this is me. I’m betting on myself. I’m betting on the franchise that THEY know what THEY’RE doing, but I’m betting on myself as the jockey. And a lot of times I’ve seen people not go through the process because they really don’t want to bet on themselves, and they blame it on the numbers. ”
Erik explains why sometimes tough love is the right motivator:
“At a Discovery Day, we met with a candidate who was very clear to us, “Guys, I’m going to another Discovery Day in two weeks and I’ll make my final decision.” We said to him, “Either you’re in with us and out with the other one, so cancel the Discover Day, sign and pay within a week. Otherwise, we’re not interested.” Because if he didn’t do that, he wouldn’t follow the system. Not all brands do that, but the best ones do. This is part of the whole process all along. And if you can’t make a decision, I tell people this is the easiest thing. You say “yes!” It’s all been fun and games up to this point. Researching, Discovery Day, this, that, and the other. But then all of a sudden, write the check, sign the agreement, start a business. That’s when it gets real, but that’s when the decision makers, the REAL entrepreneurs do it. And then they move forward and then they’re betting on themselves.”
On how much information should be ENOUGH information to make a decision, Erik offers this:
“At the end of the day, you validate what you have been told is true. I see [buying a franchise] as a really good mix between starting your own company and being that private equity company that has the forensics of everything. So really, my mindset as a franchisee, looking at franchises, is to know that I’m not going to get as much as I want and I have to be okay with that. If I hear something from the franchisor that says the startup costs are going to be X, Y and Z, I want to talk to the franchisees and say, “What were your expectations going into it? Were your expectations met?” So as long as expectations are getting met, that’s really what I want to validate. I want to validate everything that I hear, EVERYTHING that I hear throughout the sales process, not just numbers. We get so numbers focused because we think that’s everything. It’s a lot, but it’s not everything.”
Erik shares why a rock solid franchise consultant like Kim Daly is invaluable 🙂
“I have so much respect for you, what you do. You’ve coached me along the way as I was an up and coming consultant. I know you care about you people. That’s first and foremost. There’s a lot of people that don’t have as much care and handholding and thought throughout the process as you do. I can think of two consultants in the entire world that are above and beyond all the rest, and you’re one of them. I appreciate just everything that you’ve done to help me along my journey.”
Learn more about Horse Power Brands at http://horsepowerbrands.com
And if you’re ready to explore franchising, or would like some FREE consultation on how to enter into an agreement with confidence, please leave a question or comment below, or e-mail me directly right now.
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