Questions to Ask the Franchisor before Purchasing a Franchise: It’s all about asking the right questions…
Make sure to ask the franchisor the right questions before actually signing an agreement and paying up. This could prevent a lot of headaches in the future so do your research and get as much info on the franchise as possible.
1. How long has the franchise been going?
2. Does it have a good reputation?
3. Is there a specific target market?
4. Does the franchise have long-term market potential ie. is it based on a fad or a sound concept?
5. Do I need experience to run this type of franchise?
6. Is it well branded?
7. Does the franchise have a good marketing strategy?
8. Does the franchise have an Operations Manual for franchisees?
9. What degree of autonomy does the franchisor allow the franchisee in terms of decision-making?
10. Does the franchisor consult the franchisees with regards to “big” decisions?
11. What are the estimated profit margins for this type of franchise?
12. Is training conducted before opening the franchise? How long is the training period?
13. Is training ongoing? And if so, how often?
14. What level of support is available on start-up and in the months following the start-up?
15. Are there any extra administrative activities that need to be carried out once the franchise is up and running, such as monthly progress reports?
16. What exactly is included in the start-up costs?
17. What are the estimated ongoing costs?
18. Are there royalty fees? If so, how much and how does this work?
19. What are the advantages of this type of franchise?
20. What are the disadvantages of this type of franchise?
