Before you invest in a franchise, you need to get to know the brand. Sure, you could investigate the franchisor online or look at their marketing materials. But, the best way to gain insight into a brand is by asking questions – and not just any questions, but the right ones.
To help you select the best franchise opportunity for you, we’ve got ten questions to arm yourself with: five for your future franchisor and five for fellow franchise owners. Use these to get a full picture of the opportunity at hand and determine whether you’re choosing the right franchise.
5 Questions To Ask A Franchisor
Franchisors are the source of knowledge for many future franchisees. When you begin the franchise selection process, you’ll be inundated with information from franchisors, but it’s important to be strategic about the questions you ask. A franchisor’s answers often reveal whether they’re the right fit for you.
- How long does it take for your locations to turn a profit? This question gives you an idea of how much money you should designate to cover operations and cash flow. It’s recommended that most franchise owners save six months to a year’s worth of salary to cover personal expenses until their franchise turns a profit, but this varies depending on your specific situation.
- How many locations fail, and why do they fail? It’s more than just the picture of success that many franchisors want you to see. You should know how many franchises fail and the reasons behind those failures.
- What are the financing options? You may not have cash upfront to make your franchise investment. Find out what franchise financing options they’ve worked with before and determine which option is best for you.
- What makes a franchisee a good fit for this business? Asking this questions gives the franchisor the chance to tell you what they’re looking for in a franchise owner. Take note of their criteria and decide if you’re right for this franchise opportunity.
- How will you help me succeed? You want to partner with a franchisor that enables success. Learn more about the tools this franchisor offers that set you up for a profitable business.
5 Questions To Ask Franchise Owners
Talking to current franchise owners before you make an investment in a brand is an effective way to get an honest picture of a franchise opportunity. Their answers could push you in the right direction or save you from making a bad franchise investment.
- Is this franchisor supportive? There are few questions as important as this one. Finding a supportive franchisor is essential to making your franchise successful. Be sure to ask about the franchisor’s ongoing support, as you’ll need help even after your franchise is open.
- Why did you choose to invest in this particular franchise? Having insight into someone else’s decision to buy a franchise tells you a lot about the opportunity. If someone invested because they were referred or were satisfied customers who believe in the brand, that’s a good sign.
- What are the biggest operational challenges you faced during your first year as a franchise owner? Anticipating challenges you’ll be up against if you invest in this franchise opportunity gives you an advantage. Franchise owners may face challenges both in daily operations and the interactions with their franchisor. With answers to this question, you’ll be able to plan for the future and have solutions in place.
- How long did it take you to turn a profit? Because every franchise is different, you need insight into the profitability of individual locations. Ask a franchise owner how long it took them to see a return on their investment and how the products sell in their area. You want to sell products that are competitively priced and in demand.
- Have you thought about opening more stores or locations? Opening additional franchise locations is a great measure of franchise success. If the franchise owners you talk to are considering buying another franchise, this indicates that they trust the brand and the investment is worthwhile.
Get more insight into selecting the best franchise opportunity and franchisor downloading our free checklist.