The decision to purchase a franchise can be life changing. In order to turn promise into profit, potential franchise buyers must devote ample time and resources to building the business of their dreams with a brand they trust.
Here are 5 questions you can ask franchisors and current franchisees to help you make the most informed choice possible:
What are the minimum financial requirements?
Real estate costs, labor, permitting, and other expenses could overwhelm you if you lack sufficient liquid assets or net worth. Ask for a profile of the ideal franchisee in terms of financial readiness, and be realistic in determining whether or not you can meet those expectations without breaking the bank.
How long will it take to break even?
Gauge your level of financial preparedness with a long-term perspective. How long does it take for most franchise owners to see a return on their investments? Even if you can comfortably make the initial investment, make sure you have enough capital to sustain yourself until you begin to see a profit.
How do you resolve conflicts within your system?
Do your homework to get a clear idea of what franchisor-franchisee relations look like within a system. Consider how much autonomy franchise owners have, as well as how open and accessible the executive team may be when it comes to expressing concerns or sharing new ideas. Gaining insight into a system’s culture beforehand can help you find a franchise environment that complements your personal and professional identity.
Do you offer ongoing training and support?
Between 24-hour hotlines, webinars, annual sessions, and personal advisors, many franchises offer venues for additional support beyond the initial training period.
Whether you have prior industry experience or you’re new to the field, training plays a vital role in helping you adjust to the system. Make sure you know what resources will be in place to help reduce the learning curve.
What is the exit strategy?
In the event that you’d like to move on to pursue other goals,you want to be sure that you can sell your franchise or pass it on to your children without a hassle. Ask former franchisees how supportive the franchisor was in helping them transition. If terminating your agreement isn’t feasible, inquire about any available support services or opportunities for negotiation in the event that your business begins to struggle.
Investigating a franchise opportunity allows you to determine whether or not you have the capital and expertise necessary to grow a successful business within a given system. More importantly, asking the right questions can help you decide if a franchisor is offering everything you need to fulfill your business dream. Click here to learn more about how we can help you choose the right franchise system for you.