Buying a franchise can be one of the biggest decisions you make in the next 10-20 years! Trust me when I say that you want to do your due diligence when selecting a franchise because this is your life and the business you will be married to for the next decade or longer, depending on your franchise agreements. I want you to make money and have a successful and flourishing business that will change your life in every way for the better. I want you to call me and thank me for helping you select a franchise that has transformed your life. But it's not that easy.
I know what you might be thinking. When you own a franchise you can make millions, right? Not exactly. There is one part of the equation that makes a franchise win awards and break sales records. I would be lying if I did not tell you this. The major part of the equation is YOU! You determine how far ultimately you can take the franchise.
Have you ever thought about what makes a great question to ask your potential franchisor or existing franchise owners? Well to be honest, neither have I but I gather that a great question draws out a great answer. I hope to do the same for you when you are gathering questions and answers about which franchise you may want to purchase. I want you to ask great questions so that you can draw out any potentially dangerous red flags with buying a franchise.
Here's my list of questions that I deem worthwhile to ask any intelligent franchise owner. Please take notice that this is a list of questions that I would personally use for asking franchise owners about their franchise. Some of these questions may seem humorous to you and rightly so. They are a combination of questions designed to help you better know the franchisee and his/her franchise. One thing I look for is trying to place the owners in a personality profile to determine their style and to see if it aligns with my goals.
1.) How long have you owned your franchise?
2.) Is your franchise profitable?
3.) How long did it take to reach your cash flow break-even point?
4.) Were opening costs consistent with the original projections?
5.) What are your approximate earnings and are they in line with your expectations for the year?
6.) How many Unit's did you purchase (Estimate) (Compare Projections/Earnings)
(Please note that you could be buying a territory that is broken down differently. Some go by State, City, Zip Codes, USPS SFDU list et....)
7.) Did your franchisor adequately estimate the amount of operating cash that you needed?
8.) Was the training your franchisor provided thorough and did it sufficiently prepare you?
9.) What was your background prior to buying your franchise?
10.) Are you satisfied with the franchisor's support?
11.) Are you satisfied with the products and services?
12.) Is the operations manual clear, up-to-date, and adequate?
13.) How did you handle your shipping and receiving?
14.) Are you satisfied with the marketing assistance given?
15.) Was the initial training and ongoing support sufficient?
16.) Is the franchisor fair and friendly to work with? How much stress is there in producing? Does the franchisor listen and help you with your concerns?
17.) Have any franchisees had disputes with the franchisor? If so, what was their nature? Were they resolved fairly?
18.) Do you know of any disputes with competitors?
19.) Who are the major competitors?
20.) What is the company's biggest competitive advantage?
21.) What is the company's biggest competitive disadvantage?
22.) What are the major hurdles/obstacle you had to overcome to be successful?
23.) If you could start all over, would you buy this franchise again? (Would they choose the franchise that they currently own, or would they have chosen something else in the price range of this franchisee?)
24.) What were the average calls within the first 6 months?
25.) What are your current calls?
26.) What forms of marketing are you currently involved in?
27.) What percentage of your gross income are you spending on marketing?
28.) What are your biggest returns on your marketing spend? Do you have percentages?
29.) If you were required to do a build-out what were your costs?
30.) How long is your franchise agreement?
31.) Do you know the terms for renewal?
32.) Do you know what your renewal fees are?
33.) Do you plan on renewing your franchise? Why or why not? Please explain.
34.) What do you enjoy most about running this franchise?
35.) What do you enjoy the least about running this franchise?
36.) Are the systems that are in place by the franchisor current and up to date?
37.) Would you say your franchisor is behind or ahead of the technology curve?
38.) What is your franchisor doing to make you stand out above the competition?
39.) Do you trust your franchisor?
40.) Have they ever done anything to break your trust? Have they ever done anything that did not seem fair or honest to your franchise?
41.) Do you have an exclusivity agreement?
42.) Has your franchisor ever tried to open their own franchise location or doing business behind your franchise?
43.) Are you able to take a healthy vacation without attending to your franchise?
44.) How long has it been since you have taken a vacation?
45.) Does your franchise operate without you present?
46.) What are your long term goals with this franchise?
47.) If you are married, how has this franchise affected your marriage? For better or for worse?
48.) How many franchise locations do you own?
49.) How were you able to achieve those results with multiple franchise locations?
50.) If you could boil it down to one single point what would be the single most important factor for your success in this franchise?
51.) How much franchise debt are you in?
52.) What do your plans look like to pay off that debt? What are your goals?
53.) What is the biggest compliment your customer pays you and your team?
54.) What is the biggest complaint you hear about?
55.) How hard is it in your industry to find good employees?
56.) What sources do you use to find them and hire them?
57.) How long does it take you to find and hire a new employee?
58.) How long does it take to fully train them?
59.) Are these human resource systems established by the franchisor or did you create them?
60.) Does the franchise have a standard handbook to modify and have an attorney review/edit based on your state?
61.) On a scale from 1 to 10, how would you rate the human resource portion of your franchise? In other words, does the franchisor really help you with employees or not?
62.) Does the franchisor have a recommended payroll system or do they have their own?
63.) Does the franchisor help with an established paid vacations, paid leave, sick days, matching retirement, health, dental, vision benefits policies for employees?
64.) If they do please explain in detail?
65.) Does the franchisor allow you to hire from temp agencies?
66.) Would hiring from a temp agency help you gather more qualified candidates or short term help?
67.) How involved is your franchisor with the success of your franchise location?
68.) Do they aid with ongoing support and training?
69.) Is there an employee training center available to send new hires or do you train them?
70.) What's the best advice you would give someone considering this franchise?
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