Buy a Franchise

The following are some questions you should ask current and former franchisees:

• What motivated you to open your franchise?
• What line of work were you in before?
• When did you leave that career to pursue this business?
• How much time was there between leaving your career and opening your franchise?
• Why did you choose this franchise over others?

• Can you describe the initial training that the franchisor provided?
• Did this adequately prepare you?
• What do you wish you knew before you began operations?
• Did the franchisor give you the support you needed during your first year? Is there anything that was particularly helpful?
• What would you say is the biggest mistake a first-year franchise owner can make?
• What could cause a franchise to fail?

• How has the franchisor continued to provide ongoing support?
• On a scale of 1 to 5, how would you rank the level of ongoing support you receive from the franchisor?
• Can you give one example where the franchisor was successful in giving support? How could the franchisor improve?
• After your initial training, does the franchisor offer additional or ongoing training? If so, is this provided on an as-needed basis or is it regularly scheduled?
• What additional or ongoing training have you received?
• Has this additional or ongoing training helped? How so?
• Have you been required to pay for trainings?
• In your opinion, does the franchisor offer too little training or too much? Do they adjust the amount of training based on the needs of individual franchisees?
• Does the franchisor host annual conferences? Is so, are these held in-person or virtually?Has anything been lacking in terms of ongoing support from the franchisor?

• How does the franchisor contribute to your marketing efforts?
• Would you say those marketing efforts are successful?
• Is the franchisor transparent about how they spend marketing funds?
• Has the franchisor introduced you to programs for lead generation? Do you use those programs? If so, can you describe the results?
• What are the costs of lead generation programs? Do you consider them worthwhile?
• Have you added specific, local programs to generate business? Can you provide an example?
• Does the franchisor operate online or through social media, or give its franchisees the opportunity to do so? If so, does your franchise do business online or through social media?
• Are there any competitors in your area? What do you think are the major competitive advantages that set you apart from the competition?

• Are you required to purchase from the franchisor or approved suppliers, or do you have the freedom to purchase as you choose?
• If you are able to use any vendor or supplier, do you consider that good or bad? Why?
• Does the franchisor use the collective buying power of the entire franchise to obtain discounts on supplies and/or inventory beyond what the individual franchisees could achieve? Can you give an example?

• How is your relationship with the franchisor? Has this changed over time? For better or worse?
• Have you experienced any conflicts with the franchisor? If so, have they been resolved?
• Do you feel supported by the franchisor? Do you feel they care about you and your success?
• Do you feel that the franchisor acts with your best interests in mind? Always, sometimes, or never?
• Do the franchisor’s actions seem consistently competent?

• How did you decide on a location/territory?
• How much did you invest to get your business up and running? Have you recouped that investment?
• Was working capital included in that investment? How much working capital did you budget and for what period of time?
• What is your current hourly commitment to your business per week? Has that number gone up or down since you started?
• How would you describe your role in the business? Is this what you expected when you first set out? Can you describe any differences?
• Have you run into any major surprises since joining the franchise system?

• What ongoing fees are you required to pay to the franchisor? Did you plan for these when you first set out?
• Are the services that you get worth the fees that you are paying?
• Have you encountered any surprise costs or significant expenses relating to the operation of your business?
• Have you been required to pay for things you did not expect or were not prepared for? If so, can you give an example?

• Going in, what were your expectations for annual revenue? Have those expectations been realized?
• If so, how long did long did it take you to realize those expectations? Have those expectations changed based on internal or external circumstances?
• How long were you in business before you reached breakeven? Was this what you anticipated?
• What was your annual net profit (as a number or percentage of sales) last year? If you have been in business for several years, was that fairly consistent with years prior?
• What factors impact your annual net profit the most?
• Do you have plans to do things differently in the coming year? If so, what and why?
• Have you noticed anything specific that separates higher performers from lower performers in your franchise system? If so, how have you determined that?

• All things considered, if you had it to do over, would you decide to get into this business again? Why or why not?