Top 10 Questions to Ask Franchisors When Evaluating a Franchise Opportunity

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What questions should you ask franchisors?

Running a franchise business involves a significant amount of time, money and effort, so it’s important you choose the right investment opportunity. Here’s our round-up of the top 10 questions to ask franchisors when you’re investigating their franchise.

It can be hard to know how to evaluate a franchise opportunity. There’s a lot to keep in mind, and, if you’re new to the business model, a fair amount of jargon to get past (see our franchise dictionary to find answers). So, we’ve gathered some top franchisee tips when it comes to getting the most out of a franchise interview.

Questions to ask franchisors in any franchise interview 

Good franchisors don’t want unsuitable investors to represent their business, so they’ll be happy to answer your questions and make sure you have lots of information. Consider asking these 10 key questions to gain the insight you need to make an informed decision about whether you’ll continue the joining process. 

1. How long have you been using the franchise model?

If you’re going to invest your time and money in an existing business, you need to know the franchisor has plenty of experience and knows what they’re doing. They must have the skills and knowledge to support you, so check they’ve developed a positive track record using the franchise model. 

2. How do you combat business failure?

Most franchisors have experienced one or two business failures in their time - but how they dealt with them is important. It’s a good sign if the franchisor is willing to admit to past issues, as they’re likely to be unashamed of previous mistakes if they learnt from them. 

3. What are your plans for the future of the franchise?

If you’re enthusiastic about starting a productive, ethical business, you’ll want to find a franchisor who is as committed to success as you are. You should make sure they’re dedicated to supporting franchisees and have solid plans for growth. Your franchisor should develop your business with you, not drop everything after the first royalty payment. 

4. How much money have previous franchisees invested in their businesses?

Most franchisors outline the investment costs required to set up a franchise unit, but there may be hidden costs involved too. Knowing how much you can expect to spend ahead of time can help you avoid problems later on. 

Aim to find out about all the initial costs and ongoing fees, and don’t be afraid to ask whether the franchisor has any advice on reducing your outgoings. Find out more about the investment process in our article, Franchising 101: The Complete Guide To Franchise Costs In The UK

5. What support do you provide, beyond the initial training?

The inclusion of ongoing support is vital for franchisee success. While most franchisors offer an initial training scheme, you need to know whether you’ll have opportunities to boost your knowledge, learn new skills and find help when you encounter obstacles. 

Working in a franchise should feel like being part of a big family. Franchisors should, in theory, be there to help you, whenever you need them.  

6. How much money do franchisees make?

Often, franchises publish potential revenue statistics, but it’s worth finding out how much money franchisees generate in reality. Franchisors should be able to provide financial statements from existing franchise units to give you an insight into the figures you could achieve. 

Most franchisees don’t make massive profits in the first year or two – and a franchisor shouldn’t try to hide this fact. If their claims sound too good to be true, they probably are. Read up on franchise break-even points to learn more. 

7. How do you resolve conflicts?

As a franchisee, you’ll be working in a large organisation, so there’s a chance disagreements will happen from time to time. You might have a difference of opinions with your employees, other franchisees or even the franchisor. It’s important the franchise has protocols in place to resolve issues and stop tensions escalating unnecessarily.  

8. What are the contract termination clauses? 

You shouldn’t sign a franchise contract with the intention of terminating it early, but it’s worth spending some time exploring the fine print just in case you change your mind. 

If you run into financial difficulties or decide to relocate, for example, you need to know your exit will be fairly easy to organise. You may find there are extra fees or clauses stipulating you can’t terminate the agreement for a certain amount of time. This knowledge can be invaluable in helping you to make your decision.

Read our guide to terminating franchise agreements if you’d like to enhance your knowledge.

9. Do you organise franchise events throughout the year?

Franchisors with a proactive approach to business set up meetings, conferences and socials throughout the year to give franchisees the chance to access learning and networking opportunities. If you can, research the events organised in the last year and find out how they went. Did franchisees find them effective? 

10. Is the franchise a member of the BFA?

While the answer to this question shouldn’t necessarily be a deal-breaker, you’ll know you’re approaching a high-quality investment opportunity if the franchise is BFA-accredited. The British Franchise Association is the industry’s governing body and sets the standards by which franchises operate. Not only does it promote ethical franchising and give the industry credibility, but it helps its members access valuable business resources. 

Read about the benefits of choosing a BFA-approved franchise to learn more. 

How to learn about franchise opportunities

Here at Point Franchise, we’ve curated an extensive catalogue of business guides designed to support those who are thinking about joining the franchising world, or already a part of it. Browse our recent publications or find advice on specific topics using the search box. 

Knowing how to evaluate a franchise opportunity is vital if you’re to invest your money wisely, so take your time to read up on the industry and gain as much information as possible. 

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