Key Questions to Ask Before Buying Franchise

Some Key Questions to Ask Franchisees before buying!

One of the most important things to do before buying a franchise is to ask some key questions of other franchisees that are in the same business. I like to break it up into different categories so that you’re gathering enough information to help make an informed decision about whether or not to buy the business. Here is a sample of those questions:

#1 Financial Questions:
I often get asked “how much money can I make and how long will it take for me to be profitable”. While it’s important to understand that every business is different and every franchise owner will be different you still want to ask other franchisees this very question. The franchise company will be providing you with a Franchise Disclosure Document (FDD) and you want to examine it closely to understand the kinds of revenues the average franchisee (this is disclosed under Item 19) is bringing in. You can ask franchisees how long it took to get to profitability or maybe cash flow positivity or how long it took to ramp up their business.

#2 Training & Support
What kind of support did they provide once you completed your training and opened up your business? What sort of support did you get beyond the training? Are you getting field support from home office in your market ? What sort of ongoing training is provided once the initial training is complete?

#3 Marketing
Marketing and advertising are important to the business or any business for that matter. What sort of marketing programs has the franchisor put in place and have the franchisees had success? Is the franchisee satisfied with marketing support in the digital, print and Social Media space? Is the franchisor up to date on the latest and greatest in marketing for your franchise that you're looking at ?

#4 Franchisee/Franchisor Relationships
Ask the franchisee if they have had any concerns regarding the franchisor? Have they had any conflict, if so, was it resolved to their satisfaction? In the first year did the franchisor offer support at the level that you expected and has that support from the franchisor met or exceeded the expectations?

#5 Ask “Would you do it again”?
One of the last things or one of the main things that I always advise my clients to make sure they ask other franchisees is “if they have to do it all over again would they?” If they did great I think the answer is pretty simple and if they didn't or say they wouldn't I'd want to know why as everyone comes into business with their own end goal in mind and that will be different for everyone.

Discover strong concepts where you can ask these kinds of questions and determine if franchising is right for you at one of our expos.