The amount of franchise opportunities for potential investors is staggering. You have the option to invest in anything from pet care to beauty supplies to health and wellness products. The more choices you face, the more difficult it is to make the right investment decision for your future.
That’s why researching a franchise is so important. Before you invest, it’s critical to ensure that the business is built for growth. Naturally, you want to set yourself up for a successful future, and asking the right questions from the right people puts you on the best path to accomplish that.
So, whom should you talk to, and what should you ask when researching franchise opportunities? This article helps you understand the ins and outs of conducting thorough research so you’re able to select a franchise that’s primed for growth and success.
How To Research A Franchise Before You Buy
Initial research helps you accomplish a number of objectives, like fleshing out your goals for franchise ownership, choosing the right franchisor and selecting a franchise brand that provides opportunities to grow beyond your initial location.
Start with the most helpful sources of information. Of course, the franchisor is a key resource regarding questions about the brand, finances and business model. It’s also beneficial to talk to current franchise owners, as they can give you a firsthand account of how they run the business, as well as the pros and cons of selecting that particular franchise opportunity.
An additional source (that many potential franchise owners overlook) is former owners of the franchise brand. You’re likely to get an honest depiction of their journey as a franchise owner and their opinion of the franchisor with whom you’re about to partner.
Finally, turning to the Internet for information is helpful (though you have to take everything you read under serious scrutiny). Look for online reviews from former employees and franchise owners of the brand. Also seek out product reviews to ensure the franchise is a viable investment and actually delivers on its promises to clients.
15 Questions To Ask During Your Research
To help you along your franchise journey, take note of these 15 questions. Whether you seek the answers from the franchisor, franchise owners, former location owners or yourself, they’re crucial to your decision-making process.
- Does the franchise brand have a good reputation? (This applies to both the products and franchise location success rate.)
- Have they been in business long enough? (Look for an established brand. The longer they’ve been open, the better.)
- Are they accredited by Better Business Bureaus where they have existing franchise locations?
- How many franchise locations are open, and how many have opened in the last year?
- Are financial representations for existing franchise locations available for you to review?
- What financing options are available for interested future franchise owners?
- What is the initial franchise fee?
- What does the initial franchise investment fee cover (location, inventory, furnishings, etc.)?
- In what ways will your franchisor support your franchise location?
- Are there franchise lawyers whom current or former owners recommend to help you review the franchise contract?
- Are there incentives to open additional franchise locations?
- Is your store protected from other franchise locations opening in your territory?
- Does this franchisor offer conferences or sales training?
- Will you receive marketing or advertising support to reach clients in your area?
- How does this franchise facilitate growth for the future?
Want more information on choosing the right franchise? Download a free checklist on identifying a supportive franchisor.