Top Ten Questions To Ask When Exploring Franchises
Top Ten Questions To Ask When Exploring Franchises
During the research and due diligence phase of investigation, there are numerous questions to ask both the Franchisor and the existing franchisees. After all, what better source of information than from those individuals currently operating that particular franchise model.
Below are headliners from each list:
Questions to Ask the Franchisor:
1.) What is the competitive advantage of your product or service?
2.) Who are your competitors and how does your business compare?
3.) What kind of support do you provide to franchisees?
4.) How will franchisees describe their relationship with the franchisor?
5.) How many of your franchisees have gone out of business or left the system in the last 2 years and why?
Questions to Ask the Franchisees:
1.) How long have you been a franchisee? So far, are you happy and would you do it again?
2.) How would you rate your on-going support? If you need assistance, do you get it easily?
3.) How do you rate the marketing, advertising, and promotional programs?
4.) How difficult is it to find, train and retain employees?
5.) What is the main function of the owner of the business? Could you please describe a typical day?
Obviously, there are many more questions on each list. Another very important area is the “financial performance representations” (formerly called “earnings claims”). The Federal Trade Commission “allows” franchisors to make these representations, but are not mandated to do so. The FTC also states in preambles to Item 19 of the Franchise Disclosure Document that “prospects should not rely on unauthorized representations”.
Top Ten Questions To Ask When Exploring Franchises - To learn more about this author, visit Anne Barr's Website.
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When considering any franchise opportunity, it behooves the prospective franchisee to ask lots of questions to educate themselves on all the pros and cons of the opportunity.
During the research and due diligence phase of investigation, there are numerous questions to ask both the Franchisor and the existing franchisees. After all, what better source of information than from those individuals currently operating that particular franchise model.
Below are headliners from each list:
Questions to Ask the Franchisor:
1.) What is the competitive advantage of your product or service?
2.) Who are your competitors and how does your business compare?
3.) What kind of support do you provide to franchisees?
4.) How will franchisees describe their relationship with the franchisor?
5.) How many of your franchisees have gone out of business or left the system in the last 2 years and why?
Questions to Ask the Franchisees:
1.) How long have you been a franchisee? So far, are you happy and would you do it again?
2.) How would you rate your on-going support? If you need assistance, do you get it easily?
3.) How do you rate the marketing, advertising, and promotional programs?
4.) How difficult is it to find, train and retain employees?
5.) What is the main function of the owner of the business? Could you please describe a typical day?
Obviously, there are many more questions on each list. Another very important area is the “financial performance representations” (formerly called “earnings claims”). The Federal Trade Commission “allows” franchisors to make these representations, but are not mandated to do so. The FTC also states in preambles to Item 19 of the Franchise Disclosure Document that “prospects should not rely on unauthorized representations”.
Top Ten Questions To Ask When Exploring Franchises - To learn more about this author, visit Anne Barr's Website.
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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