Lance Hood:               That makes a lot of sense. How can you test drive a franchise?

Richard Parker:           Oh it's great. You actually can do it quite easily. Unlike an existing business which obviously we teach mechanisms for people to really dig in and understand the business before they buy, but what happens is by speaking to as many existing franchisees as possible, it's a great way to understand the business and all of the potential shortcomings and shortfalls related to the business.

                                    You remember that survey that I alluded to? About all the points that franchisees mentioned that they were disgruntled about, well those are typical questions that you can ask existing franchisees in the same system. You just have to call them or visit them. And you can't do that in a non-franchise business because there's no other business down the street or nearby that's a competitor. They're certainly not going to give you the information. So being able to test drive a franchise as you say, in some respects is easier than even an existing business.

                                    Now one of the things I would tell people is never disclose which franchise location you're considering. But you'll really want to learn the following things when you interview or question a franchisee. And again a franchisee who's within the system of the same type of franchise that you're looking to buy, again is a great resource.

                                    Here's a few things that you'd want to - first of all is the franchisee happy? How would he or she rate the franchisor? Again, would they buy the franchise again knowing what they know now? What are the main business problems? And can the business grow? And if so, how?

                                    Oftentimes a franchise is sort of like the entrepreneur's version of getting a job for the government. You're never going to get rich, never going to get poor. You'll earn a living. And again, it's part of some of the misconceptions about how you can grow it and that itself provides some great degree of comfort to individuals because they know they're not going get rich, not going to get poor, but they're going to be in their own business. But if your agenda is grow the business, you want to know how and how has the franchise done it? The franchisees done it. And when they took over how did they grow their business in the beginning?

Lance Hood:               How do you conduct a due diligence for a franchise business? And how is it different from a non-franchise business?

Richard Parker:           Due diligence on a non-franchise business is focused entirely upon the business you're looking to buy. Right? Does that make sense?

Lance Hood:               Absolutely.

Richard Parker:           In a franchise you must investigate the business of course, but also the franchisor. And again, don't forget those awful statistics we talked about in the survey. The last thing you want again is to put you're marbles in the franchisor's hands where the majority of his franchisees feel that they made mistake.

                                    So you're due diligence is on the business itself that's being sold, that specific business, but also on the franchisor. Because he or she, that master franchisor, is theoretically your partner in this endeavor, yet if they start or have an agenda to keep opening up more locations right nearby to you, they're also you're competitor.

                                    So you've got to investigate both sides of that equation. The franchise that you're looking to buy and the franchisor and all the issues related to contract as well. So it is more difficult. That's sort of the bad news. The good news is that in our materials we walk someone through sort of everything you need to know and exactly how do it related to a franchise acquisition on both fronts.