Top 50 questions to ask before you buy a franchise

20/07/2018 08:00 | Start a business

50 frachise questions to ask

If you want to become a successful franchisee, it's critical that you perform comprehensive due diligence before you even consider buying a franchise.

A franchise agreement is a legally binding document, and it's not as easy to get out of as it is to get into. To make sure that you're making an informed decision about the right franchise investment for you it's vital that you ask plenty of questions.

Dont be concerned about asking the franchisor too many questions. Its also in their best interests that youre completely happy with the opportunity before you part with the franchise fee. A franchisor is only successful if their franchisees succeed, so they should be glad to answer any questions that you have to help you make your decision.

50 franchise questions

To get you started, here are 50 questions that you should get the answers to when buying a franchise.

About the business

1. How long has the business been franchised?
2. How did the business start and how long was it established before it became a franchise network?
3. Who were the founders of the franchise?
4. What is their background, experience, and skill set?
5. Who owns the intellectual property?
6. What are the long-term plans for the franchise?
7. What sets you apart from your competitors?
8. How much working capital is needed as part of the total franchise investment?
9. How many other franchise locations are there?
10. What is the success rate of franchisees?
11. What percentage of franchisees renew their franchise agreements?
12. Are you a member of the British Franchise Association?

About the training and support

13. What does the initial training consist of?
14. Is the cost of the initial training included in the franchise fee?
15. What support with I receive on a day-to-day basis?
16. Are there opportunities to attend ongoing training as and when its needed?
17. What marketing support is provided?
18. Are franchisees encouraged to meet regularly as part of a more extensive support network?
19. How do you support underperforming franchises?

About the franchise agreement

20. How long is a franchise term?
21. Will my territory be protected?
22. How do you resolve disagreements or disputes?
23. What happens if my business is not performing as expected?
24. How do I sell my business?

About the franchise operations

25. What will a typical day be like for me as a franchisee?
26. What is the most significant challenge that most franchisees face?
27. Will I have any control over marketing and supplier decisions?
28. Will I get assistance with employee recruitment and training?
29. Are there any benchmark targets in place that need to be achieved?
30. Is the operations manual up to date and accessible?
31. Are there templates available to use for local marketing activity?

About site selection

32. Who is responsible for finding the ideal location for the franchise?
33. What criteria are used to find the right location?
34. Do you negotiate the lease on my behalf?
35. Will you manage the refurbishment and fit out of the site?
36. How often am I obliged to refurbish or update my franchise?

About the franchisee recruitment process

37. What attributes are you looking for in a franchisee?
38. What makes a successful franchisee?
39. Will I get chance to meet with the support team before signing the franchise agreement?

About other franchisees

40. Can I meet with existing franchisees from within the network?

Note: If the answer to this question is no, or the franchisor attempts to select who you speak to, then proceed with caution. A good franchisor should encourage you to meet with existing franchisees within the network before you commit to making a franchise investment.

Buying a franchise is a big decision to make so any reputable franchisor will happily put you in contact with their franchisees. Once you've been given the opportunity to get in touch, make sure you make the most of their experience and know-how by asking the following questions:

41. Are you satisfied with the level of training and support you receive?
42. How does the franchisor deal with conflict?
43. How long did it take you to make a profit from the franchise?
44. How many hours do you dedicate to your business?
45. If you had the chance, would you buy the franchise again?
46. Can I visit your franchise and shadow you for the day?

About you

The final set of questions, only you can answer. With over 900 franchise brands operating in the UK, its essential that you understand how well-suited youll be to running your own business and which one will be right for you.

It's a good idea to perform a self-assessment before you approach any franchisors. This way you can continue on your franchising journey confident in the knowledge that you have what it takes to be a franchisee.

You may want to ask yourself the following questions.

47. What are your strengths and weaknesses?
48. What are you passionate about?
49. How much can you afford to invest?
50. How much income do you need to support your lifestyle?

The answers to these questions should help you narrow down the number of franchise opportunities that youre suited to. You dont have to have any previous experience in the industry that youre investing in, nor do you have to be passionate about it, but these factors can help you to become more successful much faster.

Its also vital that you consider the total amount that youll need to invest, rather than just looking at the franchise fee. Some franchises demand significant set-up costs to get the business off the ground and dont forget the need for working capital and ongoing fees too.

Finally, running a profitable franchise is a great ambition to have, but if this comes at the cost of your work/life balance, then you may end up resenting your business. Find a franchise that will provide you with enough money to make you happy which requires the level of dedication and commitment that youre willing to sacrifice.

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