Deciding to become a franchisee is a monumental decision that requires considerable thought and research. Before you commit to purchasing a franchise, make sure you do due diligence and ask the franchisor plenty of questions. Do not go into the process blind or you’re simply setting your business up for failure.
Questions to Ask About Becoming a Franchisee
How do other franchisees like working with the franchisor?
Find other franchisees and talk to them. Do they like working with the franchisor? What are the positives? What are the negatives? Would they recommend that you work with the franchisor? Why or why not?
What is the reality of being a franchisee?
What would your life be like on a daily basis if you became a franchisee? What will your responsibilities be? How fast-paced is the work? To get a taste of what it would be like, ask a current franchisee if you can spend the day with her, shadowing her to get a good idea if running a franchise is right for you.
What type of support does the franchisor offer?
A franchisor will generally provide initial support to help you get the business up and running, including helping you to find a suitable location, if you’re in a brick and mortar business. But, is there ongoing support and, if there is, what type of support? Administrative? Financial? Marketing?
What happens when there is conflict?
Franchisees don’t always see eye-to-eye with the franchisor. What happens if you have a problem with one of the franchise’s policies? Can you talk with the franchisor? Is there a particular process to follow for conflict resolution?
What is your training program, if applicable, like?
Will the franchisor offer you training? Training might cover how to use the franchise’s computer system, the accounting system, and so on. Find out what type of training you will receive.
What is in the initial franchise fee and the ongoing royalty fee?
Ask and get in writing the initial franchise fee and the ongoing royalty fee you’ll have to pay, usually each month, to use the franchisor’s brand.
How long does it take until the business will start making money?
Of course, there’s no hard and fast rule to how long as a new franchisee will begin making money. But, ask the franchisor how long it typically takes for a franchisee to earn revenue.