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Franchise Owner To Be? 18 Questions To Ask Current Franchisees

Guest post by: Cory Barber

Article Overview: Okay, so you’ve been investigating a franchise opportunity that has you both eager and excited at the prospect of becoming an entrepreneur. Your franchise consultant has discussed the business in depth with you, including your role as a franchisee, the financial requirements, skill set needed, and you’ve been introduced to the franchisor. You have received a copy of the UFOC, which you have carefully investigated with an advisor. Your family is behind you 100%. So far, everything looks great! What’s next?

Franchise Owner To Be? 18 Questions To Ask Current Franchisees

Okay, so you've been investigating a franchise opportunity that has you both eager and excited at the prospect of becoming an entrepreneur. Your franchise consultant has discussed the business in depth with you, including your role as a franchisee, the financial requirements, skill set needed, and you've been introduced to the franchisor. You have received a copy of the UFOC, which you have carefully investigated with an advisor. Your family is behind you 100%. So far, everything looks great! What's next?

A very crucial next step in the process of selecting the right franchise is to call some current franchisees. The franchisor will openly provide you with a list of franchisees, and it should be a diverse list, meaning, for example, that your list will consist of 5 of the franchisors top producers in sales, 5 average producers, and 5 bottom producers. Keep in mind that there are many factors and variables for the answers you receive. For example, if a franchisee is currently on the lower end in terms of sales for that franchise, it could very well be that way because the franchisee just opened their location a month ago.

This list is extremely valuable to you, the potential franchisee, as you are able to solicit answers to key questions from franchisees that are currently conducting business in the franchise you are considering. Usually, you'll receive the most "raw", honest, un-edited feedback from franchisees, which is invaluable in assisting you in your decision making process.

That being said, lets review 18 key questions that a potential franchisee should ask a current franchisee.

1. How long have you owned your franchise?

2. Is your franchise profitable?

3. How long did it take to reach your cash flow breakeven point?



4. Were opening costs consistent with the original projections?

5. What was your background prior to buying your franchise?

6. Are you satisfied with the franchisor's support?



7. Are you satisfied with the product or service?

8. Is the operations manual clear, up-to-date and adequate?

9. Are you satisfied with the marketing and promotional assistance given?

10. Was the initial training and ongoing support sufficient?

11. Is the franchisor fair and friendly to work with?

12. Does the franchisor listen and help you with your concerns?

13. Have any franchisees had disputes with the franchisor?

14. If so, what was their nature? Were they resolved fairly?

15. Do you know of any disputes with competitors?

16. Who are the major competitors?

17. What is the company's biggest competitive advantage?

18. What is the company's biggest competitive disadvantage?

Satisfactory answers to the above set of questions may very well put you on the road to franchising with a company that is not only in line with your values, but will also enable you to attain the lifestyle you've dreamed of for you and your family.

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Article Tags: franchise consultant, franchise opportunity, franchise owner, franchisee, franchisor



Related Forum Posts
Job titles - [quote:3shpwvxj]In fact, I've had friends tell me that "Founder" is better than "Owner" since it's less possessive.[/quote:3shpwvxj] For myself, I don't care for the term "Founder" [i:3shpwvxj]because [/i:3shpwvxj]it's not possessive. You can be the founder of a company and have sold it - so it no longer belongs to you. However, if you call yourself "Owner" - people know the company is still in your hands. But I don't like Owner, either. I'd prefer President or Director, because one can be an absentee owner, whereas if one is a President or Director, people assume you're involved in the day to day activities. Manager, on the other hand, wouldn't work if its your business, because (to me, anyway) that implies that you "manage" for someone else - like at a restaurant.
Re: Enticing Franchises - Top 9 List - All Franchise listed above are in millions of dollars. Do you have the list of Franchise in thousands
Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
how much for a franchise fee? - Dear Colleague There is no easy answer to this question. Things to consider: [list=] The sizeof the Franchise Clent base Expected Turnover Intellectual Property costs (recoup) Number of Franchises Number of employees Original Set up costs Franchise admin costs An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000. Hope that this gives you some idea Take care Ian[/list]
Re: Franchise Surveys - Another good tool to researching a franchise is to speak with their existing franchisees. This contact information is included in most Franchise Disclosure Documents. In order to get a Franchise Disclosure Document or FDD as it is often referred to, you will have to complete a basic franchise application. The franchisor will then usually provide you with the FDD at that time. Included in that book of information is a list of the existing franchisees, the contract, the investment information etc... This information is required by Federal Law to be disclosed to your prior to making a purchase. So be sure to do your research and start with the Franchise Documents to get the initial information.


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