Questions to ask the Franchisor
Below is a list of questions you can ask the franchisor/development manager. Obviously, not all questions would apply to every opportunity.
- What do you look for in a prospective franchisee?
- What professional background do your top-performing franchisees come from?
- What type of marketing support do you provide?
- What does your training program look like as well as the ongoing training?
- What issues in the past have you had with franchisees and how were they resolved?
- What does your pre opening process look like?
- How do you create territories/ select real estate? What analytics do you utilize to identify viable locations for your brand?
- What type of professional background/ experience does the leadership team have?
- How do you help with equipment procurement/ vehicle leasing/ real estate site selection and construction?
- How do you assist or coach franchisees in hiring staff? Do you vet or help on the local market level with hiring?
- What is the vision of the leadership team for the next ten years, and how are they working towards that?
- Do you provide a call center? If so, how are we billed for its use?
- How do you help with online marketing? Do you provide a subdomain, SEO, SEM, etc.?
- What is the main differentiator between you and your competition?
- What happens when I would like to retire or sell my business?
- How many hours a week of involvement do you like to see your franchisees dedicate?
- What happens if I am generating business outside my territory?
- Are there benchmarks or targets that need to be achieved?
Questions to ask the Franchisees
During the due diligence process, you will be allowed to speak to franchisees in group sessions and/or one on one calls. Because franchisors are not legally able to make earnings claims, speaking to other franchisees is a great way to determine if a brand has the potential to meet your financial goals.
- What is your professional background? What kind of education, experience or skills did you have prior to purchasing this franchise, and what specifically has helped you be a better franchisee?
- Did you look at other franchise businesses before this one? if so, why did this stand out?
- What are some issues that you have had that the brand has helped you work through?
- How would you rate the training process?
- How long have you been in business?
- What was your first-year gross revenue? What is it now? When did you make a profit?
- What do you wish you had known going into business that you did not? Is there anything you would have done differently?
- How did you choose your territory/ location? If you could go back what would you change about it?
- What is your opinion on the marketing support?
- How did the franchisor help you in the hiring process of your employees?
- How much competition do you face in your local market?
- Were there any unexpected costs that put a drag on growth from week-to-week or month-to-month?
- How much time do you have to devote to daily operations versus growing your business with marketing, advertising, and new employee training?
- Is the franchisor or support staff accessible when you need them to be?
- Are you satisfied with the return on your investment so far? Do you feel you are on your way to achieving your financial goals?
- What advice would you give a new franchisee?