Whichever way you slice it when you invest in a franchise, it's a pretty big deal. As the best online courses on the subject show us, due diligence is a key part of the process, as you need to know precisely what you're getting into when you sign on the dotted line. It's not mandatory in Australia, but it is an excellent idea, as it's too late if you discover the terrible stuff after you've parted with your money.
Why Is Due Diligence Important In Business?
If you're investing in any type of business, doing your due diligence will highlight any potential issues or hidden liabilities. Of course, you have your agreement to pore over, but doing your own investigation, it will better inform you about the wisdom of signing up. No one can make informed decisions without information, so it's down to you or your lawyer to find it.
How Do You Conduct Due Diligence Checks?
Firstly, the good news is you don't need to take all the online university courses Australia has in business to carry out the necessary due diligence. You may have to get some legal advice, but it's mostly about doing some legwork and making a few calls.
Speak To Existing Franchisees
An effective way to find out what life is like working in a particular franchise is to go and talk to people who are already doing so. What kind of support does the franchise owner offer? Do they provide free courses online for development? Are they good to their franchisees?
Make sure you speak to 3 or 4 to get a good feel for things and have some questions prepared to save time. Tip: You'll find details of existing franchisees on the mandatory disclosure document that every franchisor in Australia must provide by law.
Prepare Your Cashflow Analysis
On the aforementioned mandatory disclosure document, you'll also find a list of franchise expenses that cover both start-up and ongoing costs. By using these figures and creating a profit forecast, you can get a clear idea of how viable the proposition is and what margin there is available. This will take quite a bit of planning, but any good accountant will be able to help you.
Failing that, software like Cashflow Manager and Fluidly are there to help you create a clear financial picture of the profitability of the franchise model you're buying into.
Investigate The Franchisor As A Customer
Another great way to get a peek behind the veil is to do your own investigation as a consumer to see what the interaction is like. You could either pretend to be a customer in a mystery shopper kind of scenario or simply get online and look at customer reviews to see what the general public thinks of the company in question.
If all the feedback you get is positive, then great, as those particular fears are dealt with, but if it's not, you have to wonder whether it's a product or service you want to be associated with.
Get Some Expert Advice
As thorough as you are in your own investigations, getting an expert opinion on what you've uncovered doesn't hurt. Organisations like the Franchise Advisory Centre are available for you as a franchisee, and they’re there to provide assistance and perhaps highlight any gaps in your due diligence approach.
You can't be too thorough in these cases, as you're likely to be parting with a lot of money, so do what you must be 100% sure!
OCA Online Study Courses - Giving You the Knowledge You Need
It would be true to say that the journey to starting any business, franchise or otherwise, is littered with pitfalls that need to be avoided. As we've seen here, this is the case even before you sign up! However, help is at hand for this and all of the skills needed to be a successful franchisee, thanks to video-based CPD Endorsed online study courses like those included in our great-value Franchisee Support Skills Bundle.
Our short courses are mentally stimulating, easy to digest and offer a learning experience that transcends regular, boring text-based training. Take a look at our student study demo, and you'll see first-hand exactly what kind of next-level learning you get with OCA!
If you'd like to know more about this or any of the training in our library that covers over 20 industries, visit us today at www.onlinecoursesaustralia.edu.au. There you'll see that every course comes with 1-to-1 mentoring and can be paid for via one of our easy payment options.
Alternatively, to speak directly to a staff member about your learning needs, call us at 1300 611 404 or drop us an email at [email protected], and as soon as we receive your inquiry, we'll get back to you as soon as we can.
