100 Essential Questions to Ask Before Franchising

Everything you need to ask, from the obvious to the not so obvious.

100 Essential Questions to Ask Before Franchising

So you want to buy a franchise. Your best weapon for franchise success is thorough due diligence, and this means research — lots of it.

Here’s a list of 100 questions you need to ask before signing on the dotted line and committing your capital to this investment. Some answers you may expect, some may take a bit of work; the answers to some questions may not even be the ideal scenario, but that’s OK.

As long as you answer the questions related to you honestly, and you get as much information out of the franchisors and existing franchisees as you can, having the answers to these questions will help you find the best franchise fit for you. Let’s get started.

Financial considerations


1. Have you, your spouse and knowledgeable family members discussed the idea of buying a franchise?

2. Are you in complete agreement?

3. Do you have the financial resources required to buy a franchise? If not, where are you going to get the capital?

4. Are you and your spouse ready to make the necessary sacrifices in the way of money and time in order to operate a franchise?

5. Will the possible loss of company benefits, including retirement plans, be outweighed by the potential monetary and self-pride rewards that would come from owning a franchise?

6. Have you made a thorough written balance sheet of your assets and liabilities as well as liquid cash resources?

7. Will your savings provide you with a cushion for at least one year after you’ve paid for the franchise, allowing for a period of time to break even?

8. Do you have additional sources of financing, including friends or relatives who might be able to loan you money in the event that your initial financing proves inadequate?

9. Do you realise that most new businesses, including franchises, generally do not break even for at least one to two years after opening 

10. If you have a spouse, will they remain  employed at their current occupation while the franchise is in its initial, pre-profit stage?

Personal considerations

11.  Are you and your spouse physically able to handle the emotional and physical strain involved in operating a franchise, caused by long hours and many administrative chores?

12. Will your family members, particularly small children, suffer from your absence for several years while you build up your business?

13. Are you prepared to give up some independence of action in exchange for the advantages the franchise has to offer?

14. Have you really examined the type of franchise or business you desire and truthfully concluded that you would enjoy running it for several years or until retirement?

15. Have you and your spouse had recent physical examinations?

16. Is the present state of your health and that of your spouse good?

17. Do you and your spouse enjoy working with other people?

18. Do you have the ability and experience to work smoothly and profitably with your franchisor, your employees and your customers?

19. Have you asked your friends and relatives for their candid opinions about your emotional, mental and physical suitability for running your own business?

20. Do you have a capable, willing heir to take over the business if you were to become disabled?

21. If the franchise is not near to your present home, do you realise that it would not be beneficial to sell your home and buy one closer until the new venture is successful?

Other considerations

22. Do you know an experienced, business-oriented franchise attorney who can evaluate the franchise contract you are considering?

23. Do you know an experienced, business-minded accountant?

24. Have you prepared a business plan for the franchise of your choice?

Business considerations


25. Do you and your spouse have past experience in business that will qualify you for the particular type of franchise you desire?

26. Is it possible for either you or your spouse to become employed by the type of business you seek to buy before any purchase?

27. Have you conducted independent research on the industry you are contemplating entering?

28. If you have made your choice of franchise, have you researched the background and experience of your prospective franchisor?

29. Have you determined whether the product or service you propose to sell has a market in your prospective territory at the prices you will have to charge?

30. What will the market for your product or service be like five years from now?

31. What competition exists in your prospective territory already?

32. What franchised competition exists in your territory?

33. From non-franchise businesses?

Financial factors

34. Are you satisfied with the franchisor?

35. Is your franchise profitable?

36. Will you make the profit you expect to make?

37. Are your actual costs those stated in the initial research?

38. Is the product or service you sell of good quality?

39. Is delivery of goods from the franchisor adequate?

40. How long will it take to break even?

41. Will the training provided to you be sufficient to ensure success?

42. What is your assessment of the training provided to existing franchisees?

43. Is your chosen franchisor fair and easy to work with?

44. Does your franchisor listen to franchisee concerns?

45. Have franchisees had any disputes with your franchisor?

46. If there have been any disputes, were they able to be settled amicably?

47. How was the settlement accomplished?

48. Do you know of any trouble the franchisor has had with other franchisees? What was the nature of the problem?

49. Do you know of any trouble the franchisor has had with the law?

50. Do you know of any trouble the franchisor has had with local authorities or media?

51. Do you know of any trouble the franchisor has had with competitors?

52. Are you satisfied with the marketing and promotional assistance the franchisor provides?

53. Are the operational manuals provided by the franchisor helpful to you and existing franchisees?

54. Are you able to view the manuals before committing to the franchise?

55. Are the manuals changed frequently? If so, why?

56. Are you able to make comments on the manual material?

Other questions

57. How many years has the firm offering you a franchise been in operation?

58. What is the description of the franchise area offered to you?

59. What is the total investment the franchisor requires from the franchisee?

60. How does the franchisor use the initial franchise fee?

61. What is the extent of the training the franchisor will provide for you?

62. What are your obligations for purchasing or leasing goods or services from the franchisor or other designated sources?

63. What are your obligations in relation to purchasing or leasing goods or services in accordance with the franchisor’s specifications?

64. What are the terms of your agreement regarding termination, modification and renewal conditions of the franchise agreement?

65. Under what circumstances can you terminate the franchise agreement?

66. If you decide to cancel the franchise agreement, what will it cost you?

67. What are the background experience and achievement records of key personnel?

68. How successful is the franchise operation? (Use credit reports and magazine articles to supplement information the franchisor gives you)

69. What is the franchisor’s experience in relation to past litigation or prior bankruptcies?

70. What is the quality of the financial statement the franchisor provides you?

71. Exactly what can the franchisor do for you that you cannot do yourself?

Checklist of information to secure from a franchisor

Use this checklist to help you when doing your own investigation and information-gathering.



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1 Comment

  1. well structured questions one can not go wrong if these are applied

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