If You Can Only Ask 3 Questions…

Research is the most important step before buying a franchise. So get out there and grill the people who know the franchise best.

If You Can Only Ask 3 Questions…

With the boggling array of franchise opportunities, how do you know which one represents the best business opportunity?

If you can only ask your franchisor three questions, it should be these:

1.What is your number one focus?

It should be, “The success of our franchisees.” An answer of, “Our number one focus is our own bottom line,” should draw concern.

2.Why do franchisees get in trouble?

Try identify exactly what’s going wrong for troubled franchisees. If the franchisor says, “They didn’t follow the system,” ask them how. You want to know the pressure points and difficult things to do successfully in the system.

3.How are conflicts resolved?

Ask for details of a recent franchisee conflict and how it was resolved. You’ll learn a lot about the franchisor’s respect for franchisees. Be skeptical if the franchisor says there’s never conflict.

What should you ask franchisees?

How well prepared were you when you opened? This covers many bases, from how forthcoming franchisors were, to the quality of their training. A well prepared franchisee is a good sign. Unexpected problems may suggest weaknesses in franchisee support.

How effectively do the marketing programmes bring customers to you?

Franchisors love talking about the brand and building value. But will customers come knocking and spend money in your unit? You want to hear, “We were crowded from the minute we opened.”

What is the financial reality? 

Nail down as many financial details as you can from a number of franchisees. Be sure you have answers for how much it really costs to open a unit, how soon you can make money, and how much.

About the Author
Carol has been reporting on businesses large and small for 15 years now.

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