When you think about buying a franchise, you need to investigate the franchise carefully. One of the most important things you should do is talk to other franchisees. Listed below is a list of questions to get your evaluation of the franchise or business opportunity started:
- How long have you been operating this business?
- Did the cost of your start-up fit within the initial investment numbers set out in the Offering Circular you received?
- — if not, what was different?
- Did the training program prepare you adequately to open and operate your business?
- — if not, why not?
- How would you describe the quality of the training program? the instructors?
- Did the training meet your expectations and the description given in the Offering Circular? given by the franchisor’s representatives?
- How long from the time you signed the franchise agreement and paid the franchise fee until your business opened?
- How long did it take you to reach breakeven (or enough positive cashflow to pay your operating expenses for a period of consecutive months)?
- –including a salary for yourself? – how profitable do you believe this business can be in one year?
- What kind of help did the franchisor give you in actually setting up and opening your business? and how many days was a representative present at your opening or start-up?
- When you opened, do you feel you were prepared?
- How did you choose your location or territory, what help did you receive and are you satisfied with it?
- If an advertising fee is required and/or advertising support promised, is it what you expected?
- What do you think of the management of the franchising company?
- –are they good leaders for the franchise system? –do they do what they say?
- How would you rate the financial stability of the franchisor?
- How responsive is the franchisor to your requests for help?
- If you purchase supplies or inventory from the franchisor or required suppliers, do you feel the prices are fair and the quality competitive?
- If you have an exclusive territory or other exclusive marketing or customer rights, are you truly protected from other franchisees?
- Are your exclusive rights adequate to protect you?
And the closer, when you have nothing left to ask:
If you had the choice, would you buy this franchise again? Do you recommend it?