Screening Executives & Franchise Background Checks

Author: jeff.lefler@franchisegrade.com

Date: AUG 15th, 2014

Topic: Industry Experts

Due diligence encompasses many forms for a prospective franchisee. From calling existing franchisees, researching financial viability, to reviewing the agreement and disclosure documents.

One often overlooked due diligence step, before investing into a franchise, is to research the executives of the franchise system. You will invest (both your time and your money) into a franchise system and the executives have significant influence in the direction of the franchise system for years to come.

How they lead, and their past experience will tell a lot about where the franchise system is heading.

Here are a few questions to keep in mind when performing a background check on franchisor executives;

Is it a ‘mom and pop’ franchisor?

Are all senior executives related? If so, do they have the experience to manage a franchise business?

Do they have a franchise background?

Have they worked at other franchise systems? If so, how are those systems performing now? What sort of track record do they have?

What other businesses did they work for?

If you are investing into a restaurant franchise, did executives come from related industries and do they have the knowledge to lead not only as a franchise system, but within the industry as a whole?

So how do you research a franchise executive’s background?

With LinkedIn, Google et. al., and other online resources, finding detailed backgrounds on executives is becoming easier. But, the simple answer is just ask.

It is your money invested into a franchise system for an extended period of time. The brand direction, and your investment into the brand, are shaped and can be affected, both positively and negatively by executive leadership.

Ensure you have confidence in those executives before you invest.