TOP 12 Questions to Ask a Franchisor
When meeting a franchisor, remember that it is a 2-way interview. You are assessing the opportunity, but they are also assessing you and your ability to fit with their systems and teams. If you’re meeting in person or by video, think about your presentation style, clothing and the background in the video. First impressions DO matter, on both sides.
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Top 12 Questions to Ask
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1. What sets your franchise apart from others in the industry?
2. What does the initial training program include, and what is the ongoing training or support?
3. How do you support franchisees during the first year of operations?
4. How do you help franchisees generate customers and build brand awareness?
5. What is the total initial investment range and any additional costs I should expect?
6. What are the biggest challenges franchisees typically face, and how does your system help overcome them?
7. What technology and systems do you provide to help me run the business efficiently?
8. Can you share average sales, profit margins, and financial performance representations from your FDD?
9.How does the brand plan to stay competitive in the next 5-10 years?
10. How do you define and protect franchise territories?
11. How do you support a franchisee if they struggle to meet performance standards?
12. What exit strategies exist for franchisees who want to sell or leave the system?
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Take-Aways:
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The franchisor should be looking beyond your financial situation. Although it is an important factor, they should first be looking for your true interest in the business, your background in areas that will support the business, and a strong drive to make it successful.
You, in turn, should focus on how the brand would fit with your lifestyle and values as well as the franchisor’s support to give you the best chance of success.
Don’t lead with ‘what is the ROI’. This will instantly put off a franchisor. They can’t answer that at the start as it depends on a multitude of factors. They don’t know anything about you and your abilities yet, or what your market area would be, so they honestly can’t accurately estimate ROI for you without knowing more. Secondly, and most importantly, they want to know first about your fit with the brand. Are you excited about the brand? Do you share their values? Are you driven to make it successful, and can you follow their proven playbook? If you are perceived as only interested in the money and not the brand itself, it will push them away.
Once you have each established at least a potential fit, then it’s time to start talking numbers.
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