Researching Franchises: The Importance of Interviewing Existing Franchisees
When researching franchise opportunities, it is important to contact several (at least 15) current and past franchisees. One of the key components of the Franchise Disclosure Document that the franchisor is required to provide to you is a list of current franchisees and those that have left the system within the last year.
When starting this part of the research process, you must be patient - it can take a while. You must remember that the current franchisees are very busy running their businesses. Be prepared to play phone tag and try and make yourself available when they return phone calls. They are doing you a favor by taking time out of their day to talk to you.
You must also be respectful, do not call and let the first question out of your mouth be - how much money do you make? Start slow and ask how the business is going, what made them decide to purchase this particular franchise, and are they happy.
Important information you want to learn from each current franchisee includes:
• Their background, former jobs, experience, education, etc. (this information helps you compare your background information to theirs to help you decide if they are like you and if this franchise might be a good fit for you)
• Why they decided to purchase the franchise?
• How are they getting along with the franchisor?
• Is it what they expected?
• How long did it take to reach break-even, profitability, etc.
• If they had it to do all over again, would they buy the same franchise
Former franchisees are also a wealth of information. You should be sure and find out:
• Their background, former jobs, experience, education, etc.
• Why they decided to purchase the franchise
• Why they left the franchise system
The information you will obtain from the past and present franchisees will be invaluable to your research process. It will be key in your decision to become
a franchisee of a particular franchise or not.