At FranNet, we pride ourselves on making sure that our clients are as prepared as possible when it comes time to connect with representatives from the franchise brands we work with. Most of the folks who come see us have conducted a diligent effort to educate themselves on the ins and outs of franchising in general, with a specific focus on the investigative process. But that doesn’t mean they’ve crossed every T and dotted every I. That’s where we come in. In an effort to make sure you’re as prepared as possible for the validation process, we offer this helpful guide of critical questions to ask a franchisor:
For the purpose of this exercise, we’re going to assume you already know the basics for your first Q&A. But here are a few lines of questioning you may not have considered:
Are you offering any current promotions on deals to close a new franchise owner?
If you don’t ask, you’ll never find out. It works the same if you call a local pizza delivery chain. If you tell them you want a large pizza with pepperoni and sausage, they’ll be happy to deliver it for the advertised price. But if you ask if they have any available deals on your order, you may find out that—yes—as a matter of fact, they are running a special right now on large pizzas. It’s buy one, get one free. Now you have two pizzas. That’s not to say you can end up with a multi-pack franchising deal, but it never hurts to inquire as to what sales incentives they’re currently willing to offer.
Who will be my day-to-day contact?
This is more important than most franchisees think. And the franchisor you’re negotiating with should be able to provide a clear answer. Don’t just assume that a franchise brand will put together a revolving team of customer service reps to answer your questions and provide support. A franchisor dedicated to your success as a new owner should be able to state, “Your day to day contact is Steve Davis. Steve’s been a part of this organization for 12 years and has helped dozens of our franchisees establish themselves.” Be sure to ask for Steve’s cell phone number. Just in case.
What is the long-range market demand for this franchise?
When you’re getting close to signing on the dotted line to operate a franchise of your own, you often can’t see past the horizon of your own six-month business plan. But you owe it to yourself to research market trends for the demand of whatever specific good or service this franchise will be providing. Are they in a burgeoning industry? Will the competition eventually overtake them over with a better mousetrap? The corporate team of the franchisor lives and breathes the business day in and day out. Ask for their market industry research showing that your franchise will be just as viable down the road as it is the day you buy it.
Will I have the opportunity for an expanded role?
If you’re content to buy a franchise, run it and make payroll without fail, so be it. But many franchisees want to know what their growth arc will look like in the future. If you’re consistently successful, will you have the opportunity to sit on a franchisee committee someday? Will you have ample opportunity to rep the brand outside of your market? Is there a leadership council? A rules committee? If you’re buying into this franchise concept lock stock and barrel, find out how far they’re willing to let you rise among the ranks of other franchise owners.
We hope this content has re-energized your current efforts to become an entrepreneur. The tough questions are out there. You just have to be bold enough to ask them.
…
Let’s chat! There’s a local FranNet consultant right in your market who knows that market inside and out – knows the personality of the market – knows the competitive landscape. FranNet has a great track record of assisting individuals on their path to entrepreneurship, and one of our franchise experts would love to provide you with guidance free of charge. Sound like something you might be interested in? Get started here and find your local consultant right now!