Franchising

IMPORTANT QUESTIONS TO ASK PRESENT and/or FORMER FRANCHISEES:

Call and visit several branches of the franchise to see how they operate. Remember that the franchisees are not required to speak with you, so be considerate about arranging times that are convenient for them. Here are some questions you should ask.

  • Why did you select this particular franchise over others in the same business?
  • What was your employment background prior to becoming a franchisee?
  • Did you get the training, quality products, and support you paid for and were promised? Was the promised training timely and did it prepare you to compete with similar businesses? How many hours a week do you work?
  • Did you encounter problems with the site and how did the franchisor respond?
  • How long did it take to find a site? How many sites did you locate before the franchisor approved a site?
  • How would you describe your overall franchisor/franchisee relationship?
  • Is there a franchisee association or advisory council? How long ago was it formed, and was it in response to a problem? Who controls the association? What are the current issues? Is there a meeting scheduled that I could attend?
  • What is your opinion about how competitive your franchise is with similar businesses? Are there trends that you see in the industry, in the franchisor’s business, and in your particular market area?
  • How often have you found it necessary to refer to your franchise agreement since opening? Does it provide answers to your questions? What do you wish the agreement had included? If franchisees must frequently turn to their agreements to solve problems, the relationship may not be a healthy one.
  • What is the quality of the goods or services?
  • What are your advertising costs? Are you satisfied with the franchisor’s advertising program?
  • Did the franchisor make any financial performance representations? If so, are the financial performance representations in line with your earnings? Are there any hidden or unexpected costs?
  • How long did it take to cover operating costs and earn a livable income?
  • Would you purchase another franchise from the franchisor?

If the person is a former franchisee:

  • Why did you leave the franchise system?

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