10 Most Commonly Asked Franchising Questions

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Top 10 franchise questions

We’ve created a list of key franchising questions that will help you find out the important facts when the time comes to start your own franchise unit. By getting familiar with these queries, you can make sure you’re fully prepared when you step into any franchisor interview, business discovery day or networking event.

When initiating a new business venture, it can be hard to work out what you need to know to get the process started. Fortunately, we’ve got the questions – and the answers! Below you’ll find a run-down of some of the most important franchising questions you should ask before signing on the dotted line and becoming part of the wonderful world of franchising.

1. Question: Am I guaranteed success if I buy a franchise?

Answer: This is one of the most common franchising questions. Unfortunately, the answer is no. Although it’s true that the franchise business model offers you the opportunity to follow a tried and tested business system, this is no guarantee of success. With any business, the only way to achieve profitability is through hard work, dedication and determination. If you follow the franchisors’ system correctly, show commitment and recruit well, there’s every chance you’ll enjoy the many benefits that come with being a franchisee.

If you want to know the stats, we can provide some reassurance. Last year, 97 percent of franchise units reported profitability, and six in 10 made more than £250,000. As you can see, the likelihood of turning a profit as a franchisee is fairly high. So, although we can’t guarantee success, we can tell you that franchising provides a level of security.

2. Question: What does the franchise recruitment process involve?

Answer: The franchise recruitment process can take anything from a couple of weeks to several months. This time should be used for you and the franchisor to collect enough franchise information to become confident you’re making a sensible decision. You need to be sure that the franchise is the right fit for you. You should also verify that the financial forecasts provided by the franchisor are realistic.

During this time, the franchisor will work out whether you will be a good addition to their franchise. Their ideal candidate will have many attributes, and they’ll find out whether you have them through application forms, interviews and personal checks. As well as the right experience and qualities, you’ll need enough capital to finance the franchise.

3. Question: Do I need to show the franchise agreement to my solicitor?

Answer: Before you sign the legally binding franchise agreement, it's recommended that you consult a solicitor. Although it’s often true that the terms of the franchise contract are not open to negotiation, there are other elements you can discuss in the review.

The point is, you protect yourself by having a clear understanding of your obligations and restrictions as a franchisee. A specialist franchise solicitor will have the expertise to help you gain a full understanding before you sign on the dotted line.

4. Question: What fees will I have to pay when I buy a franchise?

Answer: There are a number of different payments you’ll have to make when you become a franchisee. The initial franchise fee usually covers the right to trade using the brand name and business system, as well as have access to the training programme and operations manual.

Along with the franchise fee, set-up costs can include buying or leasing premises, fitting them out to the franchisor’s specification, equipment, stock and professional fees.

Once your franchise is up and running, it’s likely that you’ll also be required to pay ongoing fees. A royalty fee is a regular payment that covers the costs of the franchisor’s continued support and training. A marketing fee may be required if the franchise has a centralised marketing fund to which all franchisees contribute.

For more information, read Franchising 101: Your Go-To Guide For Franchise Start-Up Costs In The UK.

5. Question: Can the franchisor tell me when my franchise will be profitable?

Answer: When setting up a franchise unit, the biggest question on your lips is probably: When will I start making money?

Unlike independent businesses, franchises can look at other units in the network and get a pretty good estimate of when a new one will break even. However, it’s important to remember that every franchise is different, and many different factors will influence your journey to profitability. For this reason, the franchisor’s forecast should be used as a guide only.

Take a look at this video to learn how to calculate your break-even point.

6. Question: Do I have to like the franchise to become a franchisee?

Answer: There’s no reason why you couldn't run a successful franchise unit if you don’t like the business – as long as you follow the model. But the question is, why would you want to? Investing in a franchise is a huge commitment and will involve long hours and hard work. If you’re not passionate about the franchise, you may find the role of a franchisee very challenging.

7. Question: Who chooses the location of my franchise?

Answer: This depends which franchise you invest in. Most of the time, you'll be expected to find a suitable location and approach the franchisor to approve it.

To read more about finding the perfect location for your franchise unit, click here.

8. Question: Will I get help from the franchisor to run my franchise?

Answer: The whole point of running a franchise is that you have the freedom of being a business owner combined with the support of an experienced franchisor. The founder of the business will want to make sure their franchisees are in the best possible position to maintain profitability. This means they’ll usually provide all franchisees with a good amount of training and support.

But remember, you’ll still be responsible for operating your franchise unit. So, it’s vital you have the core characteristics of a successful entrepreneur; business acumen, determination and leadership skills.

As Dave Thomas, founder of the US fast-food giant Wendy’s, said:

"What do you need to start a business? Three simple things: know your product better than anyone, know your customer, and have a burning desire to succeed."

When you’re choosing between franchise opportunities and compiling your questions to ask a franchisor, make sure you bring up training and support. As a general rule, the higher the franchise fee, the more exhaustive the induction programme is. So – with a few exceptions – you’ll get what you pay for when it comes to extra guidance.

9. Question: Can I buy more than one franchise?

Answer: Many entrepreneurs are interested in becoming ‘master franchisees’. If you have the ambition, you could expand your portfolio by opening multiple new units in a given territory. Just make sure you get permission from your franchisor first.

10. Question: Can the franchisor take my franchise away from me?

Answer: Sadly, the answer to this franchise question is yes. If you breach the franchise agreement and don’t rectify the wrong within a set period (usually 30 days), the franchisor has the right to terminate the contract.

Obviously, this can have a negative impact on your everything from your reputation to your finances, and even your personal wellbeing. So, make sure you know your obligations when you first sign the franchise agreement by consulting a franchise professional or solicitor.

Luckily, the chances of your franchise being taken away from you are fairly low. In fact, just 4.6 percent of units undergo changes in ownership – a much lower proportion than SMEs in general.

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