Important Questions to ask a Franchisor

On their business

  • How long have you been franchising?

  • May I speak with your franchisees, and can I choose who?

  • What does your Head Office support team comprise of, can I meet them before I start my business?

  • How many franchisee failures have there been since you started?

  • How do you choose your franchisees? Do you turn people away?

On Costs

  • How much is the franchise fee, and what does this include?

  • How much working capital will I need?

  • May I see financial projections and are these based on actual performance in the network?

  • Did you run a pilot or company owned franchise before you launched? If not, why not?

  • Can you assist me with raising finance and will the finance company require security?

On Methods

  • What ongoing fees do you charge, and what are they for?

  • Do I have to buy products from you, if so do you take a commission? Does this include equipment too?

  • What do you spend on marketing/advertising and do I have to contribute?

  • Will there be a promotion when I launch my business, and is this included in my franchise fee?

  • Where is the training, and do I pay for this?

  • Once my business has started what continuing services will you provide me with?

  • Can I see a copy of the franchise agreement?

  • Can I sell my business? Are there any restrictions that effect my right to do so?

  • How long is the franchise granted for, and what happens at the end of the agreement?

On Your Involvement

  • Can I end the agreement early/terminate the contract?

  • What point of sale and promotional literature do you supply, do I have to pay for this?

  • Will I own the equipment necessary to operate the business once any finance is cleared?

  • Do I have to commit to refurbishment/re-decoration and equipment replacement?

  • Do I look for premises or do you find them for me?

Communication & Operations

  • What systems do you have in place for keeping franchisees in touch with you and each other?  Do you hold regular Franchisee Meetings?

  • Do you provide instruction and operations manuals?

  • If I run into operational problems I am unable to solve, what help and support can I expect?

  • Are you a member of the bfa, if not why?

 

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