Questions to Ask a Franchisor
We look at the questions you should \rbe asking a franchisor to get the most out of your short window of opportunity with a prospective franchisor.
How much does your franchise cost?
It’s an obvious place to start for a reason. If the required investment is totally out of your reach then the opportunity is a complete non-starter.
What role would I take on as a franchise owner in your business?
Buying into any franchise is a big step, it is important that the proposed job role suits your ambitions.
How many franchise owners do you have and could I speak to them?
Any good franchisor will operate completely transparently, allowing uncensored access to their existing franchise owners. The amount of operating owners is also a good gauge of success if the business has been franchising for some time.
What do you look for in a franchise owner and how selective are you?
A business that is just looking to ‘sell units’ is probably not a business that will give you the best support.
What level of support would I get as a franchise owner?
Most franchisors will tell you “excellent support” but by quantifying that into problem solving solutions, marketing and accounts assistance etc. you can get a much better idea of a business’ assistance.
How much profit could I make, and how much do your current franchise owners make?
Turnover figures only tell half a story. Projected profit figures, backed up by existing franchise owner’s accounts gives a much more accurate reading of market potential.
What is the next step?
Most good franchisors will have procedure in place to help you convert your interest into an opportunity
Once you have spoken briefly about what the franchisor is offering, and have established a mutual interest in exploring the opportunity, it is important to find out where the business relationship will go next. Usually, a franchisor will have procedure in place to follow.
Notes For The Prospective Investor
For potential investors at an exhibition, you should never get a hard sell. You shouldn’t get anyone putting pressure on you to make a deal on the day. In fact, you’re not even going to get a 45-minute discussion. An exhibition is an opportunity for a short interchange. It is a bit like meeting a girl you like at a party. You like her, you think she likes you; you talk a little and make a date to meet afterwards to explore the opportunity. It’s that type of situation.
If you are lucky, some franchisors will have franchise owners on the stand to talk to, but to some extent they are the happy converted so you will get bias. A franchise owner should get a prospectus, and they should expect courtesy. They should look for people who are standing up and are alert at the front of their stand. Not people who are standing at the back or too busy on their telephone or laptop to talk to them. They should look at people who genuinely want to engage them. Exhibitions are a very effective way to compare brands. The industry needs exhibitions to give it oxygen.
Nick Williams, FDS Franchise Consultant