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:
1. How long have you been operating this business?
2. 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?
3. Did the training program prepare you adequately to open and operate your business?
— if not, why not?
4. How would you describe the quality of the training program? the instructors?
5. Did the training meet your expectations and the description given in the Offering Circular? given by the franchisor’s representatives?
6. How long from the time you signed the franchise agreement and paid the franchise fee until your business opened?
7. 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?
8. 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?
9. When you opened, do you feel you were prepared?
10. How did you choose your location or territory, what help did you receive and are you satisfied with it?
11. If an advertising fee is required and/or advertising support promised, is it what you expected?
12. 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?
13. How would you rate the financial stability of the franchisor?
14. How responsive is the franchisor to your requests for help?
15. If you purchase supplies or inventory from the franchisor or required suppliers, do you feel the prices are fair and the quality competitive?
16. 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:
17. If you had the choice, would you buy this franchise again? Do you recommend it?
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