Due Diligence is to SAVE ...

We’re up to our ears at the moment in due diligence, as we tart up the final draft of our 2010 study on the role of pre-entry education and due diligence for prospective business owners.  

While our ‘industry of interest’ at the moment is franchising, what we’ve discovered applies to anyone considering a business opportunity or even a career sea change. So, when reading this, our fair non-franchising friends, simply replace the word ‘franchising’ with business or career.

Our 2010 research piece addressed ‘Placebo or Panacea: Are franchisee pre-entry education programs the panacea for greater informed decision-making or is it a placebo, with no accountable learning outcomes?' and is due for release in the coming weeks. [Subscribe to First Insight to be the first in the world to receive the media release, executive summary and a discounted offer on the purchase price on the Insight Report!]

Anyway, the study determined that due diligence is the sourcing, verification, analysis and evaluation of on a specific business opportunity. Due diligence encourages prospective franchisees to make an informed decision by:

“ ...thoroughly investigating the specifics of the franchise opportunity including size of the market, business potential, and suitability of the franchise opportunity... to verify information provided by the franchisor [and] determine financial capacity to effectively establish and operate the franchise.”

Prospective franchisees learn stuff through due diligence, but it is what they do with that knowledge that is the kicker.

The Australian franchise sector is very good at spruiking motherhood statements about what needs to done during due diligence without guiding prospective franchisees through the learning journey as to how and why.

We believe that such learnings needs to be grounded in a framework for pre-entry education and due diligence for it to have valuable impact.

Pre-entry education and due diligence give both prospective franchisees and franchisors the tools, insight and information to make confident, informed decisions. Undercooked pre-entry education and due diligence manifest themselves in weird, wonderful and worrisome ways and are evident when a franchisee says ‘I didn’t know that’ ... ‘No one told me!’ ... ‘That’s the franchisor’s responsibility, isn’t it?!’

About time we stop hearing these phrases, oui?

Nous sommes d'accord aussi!

We are tinkering with a framework for conducting robust due diligence. Our framework encourages prospective franchisees and franchisors to SAVE ...

S ource information from a variety of individuals and organisations regarding franchising, the industry the franchise system is in and the specific business opportunity [or on the prospective franchisee].

A nalyse the information provided in collaboration with seasoned franchise, legal, accounting and financial professionals. 

V erify that the information is true and correct, and then

E valuate the information, together with their own learning and experiences and consider the franchise opportunity against their own needs, capabilities and goals [or against the franchise system’s vision and values]

We’re playing around with SAVE as a learning process and welcome your comments and suggestions.