10 Questions for Franchisees
Today I’m gonna talk about 10 questions you need to ask franchisees if you’re evaluating the purchase of a franchiseA franchise is when a business (franchisor) allows a party (franchisee) to acquire its know-how, procedures, processes, trademarks, intellectual property, use of its business model, brand and rights to sell its products and services. The franchisee signs a contract (franchise agreement) with the franchisor to acquire the franchise and generally has a territory granted to operate. What is a Franchise?… More in the United States. These are very important items that you need to consider before buying a franchise in the U.S., and many of these questions can be applied to buying a franchise from around the world.
There are a few different ways that you can talk to franchisees. Franchisors can introduce you to franchisees as well as you can go through the franchise disclosure document. Then reach out directly to franchisees that are currently in the system as well as franchisees that have recently left the franchises. And are no longer part of the franchise.
It’s important to consider that franchisees don’t owe you anything if you’re looking to evaluate their franchiseA franchise is when a business (franchisor) allows a party (franchisee) to acquire its know-how, procedures, processes, trademarks, intellectual property, use of its business model, brand and rights to sell its products and services. The franchisee signs a contract (franchise agreement) with the franchisor to acquire the franchise and generally has a territory granted to operate. What is a Franchise?… More. Also, if you’re looking to open up in a similar territory. They might have their guard up and not be willing to share so much information with you.
So let’s get right into it. Number one thing, you should start it easy.
1 – How’d you decide to start the business? Can you tell me a little bit about your experience from day one? That can set a precedent for the conversation. So it opens them up, allows them to speak, and doesn’t go right into the financials.
2 – Can you tell me a little about the start-up of your franchise?
3 – Working Capital needed to break even?
4 – How is the initial and ongoing support from the franchisor?
5 – What is your main function? A typical day? Can you tell me a little bit about running the day-to-day of this franchise?
6 – Hours worked? Have you always worked these hours or was it only after the business hit critical mass?
7 – How difficult is it to find, train, and retain employees?
8 – Can you share some information on the financials SalesThe total amount in dollars made in the business before expenses are deducted. See also Gross Revenue…., Profit?
And now a couple of closing questions.
9 – If you had to do it again, would you buy this franchise?
10 – Is there anything else that you would like to share with me, or that you think might help me? They might have some items that they didn’t wanna offer up or I would just open it up
So there you have it. Those are 10 questions you should be asking franchisees as part of the evaluation process before buying a U.S. franchise. To learn more visit our website Vetted Biz where our research team has reviewed over 2,900 franchises and knows the key facts and data that signal a successful franchise system.
