As a prospective franchisee, one of the keys to success is making as informed a decision as possible about your choice of franchise opportunity. While all viable franchise systems have successful franchisees, in order for you to have a reasonable chance of success in your chosen system, you need to go in eyes wide open and with a clear understanding of the legal and financial risks involved.
With this in mind, before you buy, you need to ask questions – lots of questions. Do not take anything the franchisor’s representatives say for granted, and make sure you are relying on multiple sources of information.
Questions to Ask the Franchisor
Some key questions to ask the franchisor’s sales representatives and operational managers include:
- What sets your franchise apart from the competing franchised brands?
- How has the franchise system changed and grown over the past five years?
- How much ongoing support can I expect once I open for business? Who will be my point of contact?
- How are you making use of franchisees’ advertising fund contributions?
- Are there any significant changes or developments on the horizon?
Questions to Ask Current Franchisees
In speaking with current franchisees within the franchise system, some of the questions you may want to have answered include:
- Would you buy the same franchise again if you could go back and do it over?
- Are you seeing any direct benefits from your marketing fund contribution?
- How accessible are the franchisor’s support staff?
- Do you frequently have issues with system technology or items purchased from designated suppliers?
- Have you had any issues with territorial encroachment?
Questions to Ask Former Franchisees
Contact information for both current and former franchisees should be listed in Item 20 of the franchisor’s Franchise Disclosure Document (FDD). Questions to ask former franchisees include:
- Why are you no longer in the franchise system?
- What were your biggest issues with the franchise?
- How was your experience dealing with the franchisor’s representatives while you were a franchisee?
- How has your experience been post-expiration or post-termination?
- What else do I need to know about the franchise system?
Questions to Ask Your Franchise Attorney
Hiring an experienced franchise attorney is one of the best ways to protect yourself during the franchise buying process. When choosing an attorney, some of the questions you may want to ask include:
- How much experience do you have in franchising?
- Do you represent franchisors and franchisees, or just franchisees?
- Do you offer flat-fee franchise business reviews?
- How quickly can you complete your review of my franchise documents?
- Will you be able to negotiate my franchise agreement?
Request a Confidential Initial Consultation With Our Franchise Attorney
Our franchise attorney has over 30 years of experience exclusively representing franchisees and dealers. If you are thinking about buying a franchise and would like more tips on conducting your due diligence or would like to learn more about our firm’s flat-fee franchise business review packages, please call 202-293-3947 or request a free consultation online today.