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The questions every franchise prospect should ask?

Posted on 7 September 2010
The questions every franchise prospect should ask?

I see a lot of franchising prospects who are considering purchasing a franchise. In addition to seeing a lawyer and an accountant it is essential that a prospect also engages a franchising expert to review the franchise operation and  the system.

Irrespective of the advice that a professional provides to the prospect, the most important and crucial recommendation we make is that the prospect should speak directly to the existing franchisees.

A Franchisor is obliged under the Franchising Code to provide the information of all current and past franchisees.

This vital conversation can be wasted if the correct type of questions are not asked in a particular way.

So what are some of the questions that should be asked of an existing franchisee?

  • Are you related to The Franchisor in any way i.e. through marriage or other?
  • Did you know The Franchisor personally before entering into a franchise agreement?
  • What's the best thing about being a franchisee in this franchise system?
  • What's the worst thing?
  • Do you have any regrets?
  • Do you have any concerns?
  • Are you being supported by The Franchisor? How? And how often?
  • Would you recommend this franchise to a close friend or relative?
  • Are you running a profitable business?
  • How long did it take you to reach breakeven in the business?
  • Did your growth match your expectations?

This list is not complete as there are questions to be asked that are specific to the type of franchise business, but they do go a long way to hear the truth from "the horses mouth".

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Tags: Franchisee Franchising

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