The Power of Online Reviews In Franchise Research

As with any major financial decision, due diligence and research are important when deciding whether or not to invest in a franchise. And online reviews are a part of that. However, there’s a fine line between careful due diligence and “analysis paralysis,” said Lisa Welko, a franchise consultant with Integrity Franchise Group.

“Just like anything on the internet, we need to remember ‘Buyer Beware’,” she said. “Online reviews can be a helpful tool, but we need to remember that it’s one tool in the arsenal, so don’t let one bad review torpedo your research.”

Prospective franchise owners need to have a discerning eye when it comes to what reviews are genuine and what is promotional.

“People will sometimes only want to look at brands on certain ‘Top Lists,’” noted Welko. “However, each list is different, with a different set of parameters, and lists can be created to fit an advertising initiative — with little or no substance.”

For example, The Franchise 500 posted by Entrepreneur magazine states the most important factors that go into the ranking include “financial strength and stability, growth rate and size of the system.” However subjective points, such as franchisee satisfaction, aren’t ranked on that particular list.

In addition to being cautious about relying solely on industry-specific rankings, it's essential for prospective franchise owners to delve deeper into individual reviews. Genuine reviews often provide specific details about the franchise experience, highlighting both positive and negative aspects. Look for reviews that discuss the day-to-day challenges, support from the franchisor, and overall satisfaction. It is also advisable to explore multiple sources of reviews, including independent review platforms, social media and forums dedicated to franchise discussions.

To get a realistic picture of a franchise’s strengths, weaknesses and overall performance, prospective owners should look for overall themes and trends in the dialogue,” said Welko. “But it’s important to not get “too caught up in the hype.”

“Remember, the most important thing about researching any franchise is the opportunity to personally validate with franchise owners,” added the consultant. “Use the reviews to formulate your questions and opinions — then validate those findings with actual owners in the system.”

As for looking out for red flags, this takes some reading between the lines. Every franchise system is bound to have a few unhappy owners, but it is crucial to note whether those people are unhappy because of poor support or because they made a poor decision along the way.

As you navigate your franchise research, remember that online reviews are just a piece of the puzzle in the due diligence process. Use reviews as a tool, but the real insights come from direct interactions with franchise owners.